Today marks exactly six months since Facebook (FB) unveiled its Libra cryptocurrency. Facebook stock has gained 5.3% since the unveiling. Meanwhile, PayPal (PYPL) stock has dropped 6.5%. PayPal was one of the original partners in Facebook’s Libra project. It later became the first partner to leave the project, leading several others to exit. Last month, PayPal CEO Dan Schulman explained why the company had to ditch the Libra project.
Vodafone and Facebook stocks up since Libra unveiling
However, not all Libra partner stocks have risen. Stocks of Libra partners Lyft (LYFT) and Uber Technologies (UBER) have declined. Lyft stock has fallen 26% since the Libra unveiling, while Uber stock has retreated by 32%. Stocks of former Libra partners Visa (V) and MasterCard (MA) have gained 9.6% and 14.4% since Libra’s unveiling.
Libra’s future remains uncertain
Facebook and its partners continue to work on developing the technology and network that will underpin Libra transactions. On November 15, the Libra Association announced completing more than 50,000 Libra test transactions. Facebook stock jumped more than 1.0% that day.
Although Libra’s development remains on course, the future of the project and Facebook’s plans for it remain uncertain. From the US to Europe, Facebook’s Libra cryptocurrency project has run into strong regulatory headwinds. US financial regulators and politicians think Libra would pose a huge risk to the global financial system. Their European counterparts hold similar views. In fact, Europe’s top economies have gone as far as declaring they won’t allow Libra to launch in the region.
Facebook and its Libra partners hoped to launch the cryptocurrency early next year. But regulatory hurdles may prevent that from happening. Facebook has said it will not launch Libra until it has secured regulatory approval.
Facebook counts on Libra to diversify its business
Libra’s delayed launch, or failure to launch, would be a big blow to Facebook’s business diversification efforts. Facebook set up a subsidiary, Calibra, through which it hopes to offer Libra-based financial services. Through Calibra, Facebook aims to supercharge its advertising business and open a new revenue stream outside advertising. Although the company currently relies on the advertising market, there is a growing need to diversify. Facebook stock has gained more than 50% this year.