In April 2020, Facebook updated its Libra white paper.
More specifically, it totally revamped its plans for the Libra cryptocurrency.
Did you, like me, expect mainstream coverage of this event? Did you sit on this article for almost two months hoping enough people would notice to make it worth publishing?
YouTube didn’t cover it. Twitter ignored it. Bloomberg gave it back-page treatment.
A few outlets recently covered the Libra wallet’s name-change (it’ll go by Novi, not Calibra). Is that really the most newsworthy part of this story?
I guess nobody else cares, but I do. You should, too.
Maybe everybody ignored the news because they think Libra is dead?
Alas, my friend, nothing could be further from the truth.
With the recent addition of Temasek, the Singapore government’s investment branch, the Libra Association now has 27 members. More entities join each month, like an ever-expanding group of Voltron lions assembling an army of super robots to take over the world’s financial system.
And now, a new whitepaper to boot.
So you’d think people would care, or at least notice, right?
In 2019, the mere mention of Libra sent people into a tizzy. Crypto twitter erupted with memes and mocking tweets. U.S. Congress held emergency hearings and the E.U. threatened to put Facebook out of business. Every major crypto outlet plastered the news on their landing pages.
Why did everybody lose their shit last year but barely flinch this time?
Typical Facebook: it started out cool, then got lame
When Facebook first announced its plans to create the Libra cryptocurrency, I loved the idea. For more about my thoughts at that moment, read my July 2019 post, Why Libra is Different Than All the Other Cryptocurrencies.
(TL;DR, now that a huge corporation has launched a private, global, decentralized currency with an independent monetary system, the world’s governments will have to take cryptocurrency seriously—and in doing so, finally carve out the legislative, political, and legal frameworks necessary for cryptocurrency to thrive.)
I was wrong.
After very harsh pushback from governments, Libra Association members decided they’d rather make money than create it. As a result, they pivoted to a scaled-back, neutered version of Libra.
They even hired a former U.S. government financial crime regulator as general counsel.
Less crypto, more currency
Libra no longer represents a game-changing, paradigm-shifting effort that will challenge long-held notions of privacy and monetary sovereignty.
Now, it’s just another way for a centralized entity to move money from one customer to another.
As revealed in the updated white paper, Libra will no longer have the features that made it a permissionless financial platform. It added comprehensive anti-money laundering protocols and created ways for law enforcement to see personal transactions.
On top of that, countries will have the ability to enforce sanctions over coins in the network.
And, instead of getting an independent currency backed by a basket of financial assets, users will get stablecoins denominated in their local currencies.
Why even bother with a blockchain?
From corporate crypto to government money
Props to Facebook and its partners for sticking their necks out.
As the first corporation to challenge the monetary sovereignty of governments, it deserves a begrudging pat on the back. Also, I have heard developers speak well about the code it’s using to build the Libra platform.
I certainly understand why the Libra Association threw in the towel. To move forward, they had to give governments what they wanted. Celo did the same thing and started picking up steam. I imagine Libra Association members just wanted to get moving.
A friend joked Facebook should have developed Libra in stealth mode and listed it on some shitty crypto exchange. That’s what most crypto teams are doing now with altcoins and governments don’t seem too concerned.
Score: Government money monopoly 1, financial sovereignty 0.
Mark Helfman is editor of Crypto is Easy and a top writer on Medium for bitcoin and investing topics. His book, Consensusland, explores the social, cultural, and business challenges of a fictional country that runs on cryptocurrency. In a past life, he worked for U.S. House Speaker Nancy Pelosi.