We just got a clear sign that Facebook’s dodgy reputation means it has a massive struggle to persuade people to use its new cryptocurrency Libra (FB)


FILE - In this April 10, 2018, file photo, Facebook CEO Mark Zuckerberg testifies before a joint hearing of the Commerce and Judiciary Committees on Capitol Hill in Washington. Weeks after Facebook refused to remove a doctored video of House Speaker Nancy Pelosi slurring her words, Zuckerberg is getting a taste of his own medicine: fake footage showing him gloating over his one-man domination of the world. (AP Photo/Andrew Harnik, File)

  • Most Americans don’t seem to plan to use Facebook’s cryptocurrency Libra.
  • A survey by Jefferies found 80% of US social media users are “unlikely” or “very unlikely” to utilise the product.
  • A lack in trust in Facebook was cited as a major concern as to why.
  • The findings highlight the massive struggle Facebook will face to convince people to get on board, given its past scandals.
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In June, Facebook unveiled Libra, an ambitious new cryptocurrency that wants to make “moving money around the world should be as easy and cheap as sending a text message.”

So far, most people don’t seem to be convinced.

Financial services Jefferies conducted a survey of American social media users after Libra’s announcement, and found that people are overwhelmingly skeptical of the effort, saying they’re unlikely to use it and citing lack of trust in Facebook as a major reason for that.

80% of respondents said they were “unlikely” or “very unlikely” to make use of Libra when it launches, with 45% saying “I don’t trust Facebook” was their biggest concern with it. 

The data highlights the uphill struggle that Facebook will face to persuade people to get on board with its efforts, illustrating how Facebook’s years of scandals and ugly missteps are now coming back to bite it as it attempts to move on with ambitious new ventures.

Libra won’t launch until 2020, and so the $556 billion company still has more than six months to get Libra’s message out and convince users of its potential utility — but it’s starting from a position of notable weakness. A company spokesperson did not immediately respond to Business Insider’s request for comment.

Facebook’s scandals have squandered consumer trust

Libra is Facebook’s brainchild, and the company has led the early development of the product, but the plan is to surrender control to an independent organisation led by what is hoped will be a consortium of more than 100 member companies. A few dozen partners have tentatively signed on with that consortium thus far, including MasterCard, Visa, Uber, Spotify, and Coinbase.

The vision for Libra is a digital currency without borders that will let users send money and pay for things cheaply and easily, with Facebook integrating it into its messaging apps like WhatsApp and Messenger, and building a digital wallet for consumers called Calibra. 

Jefferies surveyed more than 600 US social media users, and found intense skepticism — but it may be better received in emerging market countries, where consumer financial infrastructure is less developed and the Facebook brand is less tainted.

Facebook has spent the last two years lurching from scandal to scandal — from Cambridge Analytica’s misappropriation of tens of millions of users’ data to the social network’s role in spreading hate speech that fueled genocide in Myanmar.

“Although our survey analyzed only US social media users, we emphasize that in order for Libra to scale successfully, adoption will need to be broad-based. Effectively, without substantial network effects, we do not expect Libra to replace existing forms of cashless payments — at least not in the near term,” analysts Brent Hill and James Heaney wrote in a research note.

“In addition to low trust in FB, almost 40% of respondents said they already had a mobile payment wallet and saw no reason to use Libra. This result raises the question of what problem Libra actually solves. We believe there may be a better use case in emerging markets, where adoption of mobile payments is lower and currencies are more volatile.”

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