Mark Zuckerberg spoke yesterday about Libra during Facebook’s quarterly earnings release.
The Facebook CEO said the company will take “as much time as necessary” to secure the support and approval of regulators and other institutions before making the Libra cryptocurrency available to the public.
Speaking on a conference call with financial analysts on Wednesday, the social media founder sought to reassure investors that Facebook will act responsibly while developing Libra, the ambitious cryptocurrency project unveiled last month and presented as a potential payment solution for the unbanked.
Zuckerberg explained that Facebook has worked with prospective members of the organization that will govern the currency, the Libra Association, and published a white paper last month to address regulators’, governments’ and the public’s questions.
“We are committed to working with policymakers to get this right,” he added.
Could the Libra launch be delayed?
Facebook initially intended to launch the currency in the first half of 2020, but regulatory pushback and political scrutiny have cast doubt on that timeline.
When an analyst asked about timing, Zuckerberg said Facebook’s approach to Libra is to “try to have a very open dialogue,” and that unlike in the past—when the company might have simply released a new product—Facebook is now focused on outlining the specific ideas and values it believes a potential service should embody.
“We have opened a period as long as it takes to answer questions from regulators, experts and legislators and to find the best path forward,” Zuckerberg said. “That’s certainly what we intend to do with Libra. We worked with the 27 other members of the Association to publish the white paper and launch the idea, and we anticipated this would be a high-profile, highly regulated area with many questions. We need to address them.”
Comments echo David Marcus’ testimony to the U.S. Congress
Zuckerberg’s remarks mirror those made by David Marcus, who leads the Libra project at Facebook.
Marcus testified before Congress last week during back-to-back hearings to reassure lawmakers that Facebook would not launch Libra until regulatory concerns had been resolved.
However, Marcus stopped short of promising to halt development entirely, resisting repeated calls from U.S. legislators to do so.
“We are trying to deliver a safe, stable and well-regulated product, so that has always been the strategy and we will continue to engage on this,” Zuckerberg concluded on Wednesday.
Did Zuckerberg’s comments push Bitcoin down?
In short, Facebook aimed to calm investors by confirming it will not rush Libra to market.
That means the planned early-2020 launch is likely to be delayed.
Several experts and analysts had attributed part of Bitcoin’s recent rally to expectations that Facebook’s Libra could introduce cryptocurrencies to a global mainstream audience, potentially benefiting Bitcoin through broader adoption.
By that logic, news of a delay for Facebook’s cryptocurrency project is a bearish factor for Bitcoin.
Coincidentally or not, Zuckerberg’s remarks yesterday appear to have coincided with BTC/USD slipping back below the psychologically important $10,000 level.
From a technical perspective, the first short-term support to watch is $9,500, followed by a more significant support level at $9,000. That latter level corresponds roughly to a 50% retracement of the rise from early April to the annual peak near $14,000 on June 26.
A break below that key threshold would call into question the underlying bullish trend for BTC/USD, as seen on the daily chart.