Facebook's darkest hour: Why so many companies "abandoned" Libra
Editor's Note: This article comes fromCarbon chain value (ID: cc-value), Author: Bai Ye, reproduced by Odaily with authorization.
Editor's Note: This article comes from
Carbon chain value (ID: cc-value)
Carbon chain value (ID: cc-value)
, Author: Bai Ye, reproduced by Odaily with authorization.
We found that these companies that are currently "not cold" to the Libra Association have a common feature: except for eBay, they are all payment processing service providers.
When Facebook's digital currency project Libra released the white paper on June 18, the rampant expansion plan shocked countless people. As the world's largest social network, Facebook already has billions of users and tens of billions of dollars in annual profits. But it seems that they are not satisfied with the status quo, but choose to open up a "new front" - taking over the currency themselves.
David Marcus, head of Facebook's blockchain, elaborated on the Lirba plan in a white paper, and as part of the Libra Association, some financial giants also expressed their willingness to assist in the management of Libra. At least at that time, Facebook was still confident in its vision of creating an international currency, and its partners were giants in various industries, so it seemed that the arrival of Libra would be unstoppable.
But the good times didn't last long, and this seemingly stable building suddenly began to collapse. On October 4th, the first company to abandon Libra emerged: PayPal. Although many people knew at the time that there would be companies that would choose to give up joining the Libra project, they did not expect the payment giant PayPal to be the first to give up, because the Facebook blockchain and cryptocurrency development team had inextricable connections with PayPal. relationship, and David Marcus himself had previously held key positions at PayPal.
Soon, this move triggered a butterfly effect.
On October 11, Visa, MasterCard, eBay, payment company Stripe, and Mercado Pago announced their withdrawal from the Libra Association. According to the Financial Times:
The reason eBay and Stripe withdrew from the cryptocurrency project Libra was political pressure, and a Mastercard spokesperson also confirmed that the company will withdraw.
A spokesperson for eBay told the FT that while the company respects the Libra Association's vision, it has chosen to focus on providing its customers with a "managed payment experience" at this stage.
A Stripe spokesperson also confirmed the company's withdrawal from Libra, saying that Stripe supports projects that make online payments easier for people around the world. Libra has this potential, and Stripe will pay close attention to its progress and continue to cooperate with the Libra Association at a later stage.
A spokesperson for Mercado Pago said they would re-evaluate Libra after "more clarity" has been gained on the Libra project.
This means that all payment service processors in the United States have withdrawn from the Libra Association, leaving only the last payment processing company PayU (the company has not yet explained whether to withdraw from Libra). It was a shocking turning point for the Facebook-backed project and the first clear sign that the Libra Association may have been hit more than they can bear.
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The loss of five founding members in just a few hours seems like a hasty decision, but it also looks like a long-planned plan, because the timing of the launch of these companies is very "interesting". Because on October 14, all founding members will come to Geneva, Switzerland for the first Libra Council meeting.
The importance of this meeting cannot be overstated, as they will identify their different roles and try to answer all the governance questions that have not been clearly articulated in the white paper. Ultimately, a formal charter will be drawn up by all Libra Association founding members, and each member will be required to sign the new agreement.
There is no doubt that the time for Facebook's digital currency project Libra to "get real" is getting closer, which means that each founding member must make specific commitments according to their specific aspects-so if someone is interested in The project is still in doubt, and the best time is to exit before signing the official charter.
In fact, opting out of the Libra Association doesn’t look all that dire at this point, and doesn’t have any catastrophic consequences for the companies, though those founding members who are willing to sign off on a formal charter will gain long-term support.
The nature of the company that opted out of the Libra Association is also very "interesting"
We found that these companies that are currently "not cold" to the Libra Association have a common feature: except for eBay, they are all payment processing service providers.
For regulated payment service providers, they need to meet specific regulations such as fraud, money laundering, and sanctions enforcement. Not only that, governments of various countries have also begun to realize that Libra is actually difficult to meet these regulatory constraints, which means that if payment service providers choose to cooperate with Libra, they are likely to fall into the "quake" of regulatory crackdowns, resulting in a Series unnecessary trouble.
As noted in three previous letters sent by two U.S. senators, Brian Schatz and Sherrod Brown, to payments giant Visa CEO Alfred F. Kelly Jr., Stripe CEO Patrick Collinson, and Mastercard CEO and President Ajaypal Singh Banga As expected, Facebook has not provided satisfactory answers to regulatory questions about terrorism, money laundering, monetary policy, and economic instability, so it is hoped that these payment companies can leave the Libra Association.
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Facebook takes the benefits, but the scapegoat partner?
“Think what would happen if Facebook combined encrypted messaging and anonymous global payments via Libra? It’s chilling.” – Brian Schatz and Sherrod Brown.
The implication is that Facebook seems to want to engage in financial activities, but they don’t want to take responsibility. The means they choose is to cooperate with regulated payment service providers. If Libra makes transactions too easy for terrorists and money launderers, Visa, Mastercard, and other Libra payment partners may end up being blamed for their accomplices.
For payment service processors, they finally understand how scary and scary the idea of Libra is. But for those founding members of the Libra Association who do not provide payment services, there is no need to opt out at all. These companies include charities, venture capital firms, and sharing economy service giants like Uber and Lyft. The pressure from financial regulators, and the rashness to withdraw from the Libra Association may also prevent them from enjoying the series of benefits brought by Facebook resources.
