Not many people understand the complexities of cryptocurrency and an alarming number of people don’t trust Facebook; it seems combining the two is not a well-received idea.
New research from messaging app Viber has suggested 49% of consumers in the UK and US would not trust the social media giant when it comes to cryptocurrency. Facebook might want to get a foothold in this embryonic segment of the technology industry, however if consumers have lost trust in the firm, you have to wonder whether this will kill the potential of cryptocurrency through association.
There are two interesting areas concerning Facebook’s drive towards cryptocurrency. Firstly, many people will start asking what cryptocurrency actually is and what it does. And secondly, when talking about money, many will start to question whether Facebook should be considered a trusted partner with its track record.
Starting with the definition of cryptocurrency, we will not pretend to be an expert on the segment and few in the general public will have a concrete grasp either. This lack of understanding creates uneasiness and a lack of trust, while the fact it is largely unregulated simply compounds this sense of nervousness.
This environment of confusion also seems to filter upwards towards governments and regulators; no-one has seemed to want to take ownership and when it was suggested the Swiss would take the lead, the Swiss regulator seemed very confused.
We’ve already seen the complications the world faces when a void in the regulatory landscape is formed and it does seem cryptocurrency is heading the same direction. Talking about the issues which arise during a regulatory void, this leads us onto the second interesting point brought forward in this research.
In the UK, 49% of consumers has suggested they would not trust Facebook at all when it comes to keeping information secure through its new cryptocurrency service Libra. Only 4% said they would trust Facebook, while 28% have not made their mind up. The numbers were remarkably similar for consumers in the US, however even less, 2.5%, explicitly stated they would trust Facebook.
Over the last 12-18 months, Facebook has destroyed any credibility the consumer had in it and has done little to earn it back. Cambridge Analytica has a disaster for Facebook though Facebook’s response to investigations and leaked memos since have further fuelled the distaste felt by the consumer towards the social media giant. Largely, the fallout from this saga is in the past, but the damage to Facebook’s reputation has been dealt.
Dealing with personal information is one thing but managing transactions and handling financial data is a completely different ask. Facebook is asking for a lot of trust and credit with the launch of Libra. As mentioned before, if Facebook is attempting to be the poster-boy to take the concept of cryptocurrency to the masses, let’s hope its reputation does not pollute a potentially very exciting segment.