Facebook’s Libra isn’t finished yet
The political and regulatory backlash has driven leading payments companies out of the Libra association, but a new version of the revolutionary stablecoin may yet appear.
No fintech initiative has ever had such an extraordinary impact as that of Facebook’s Libra.
The mere announcement of a plan to launch a reserve-backed, blockchain-based stablecoin representing a new world currency immediately drew hostile reactions from governments concerned at loss of sovereignty, from central banks worried about financial system stability and alarmed at the potential reduced impact of monetary policy, and from financial regulators worried about money laundering.
More positively, the project has motivated central banks to intensify their own efforts towards setting up digital versions of their own national currencies.
In October, Facebook felt the impact of this backlash when most of the established payment companies – Visa, Mastercard, Stripe, Mercado Pago and eBay – that had been due to join the Libra association withdrew their support, reasoning it was not, after all, in their best interests to antagonize central banks and regulators.
The first assumption after the leading payments firms withdrew from the Libra association was that the project is now doomed thanks to its close association with Facebook’s toxic brand and widespread distrust of the company, which had done such a poor job of presenting itself as merely one partner among many in the Libra association.