It’s never a good sign when a company is forced to leave something it’s created behind, but in the case of Facebook and Libra, the danger is all too real.
Libra Is Heading for the “No Fly” Zone
Following his recent testimony before Congress regarding the new financial platform, Mark Zuckerberg announced that if Libra moves forward without congressional approval, Facebook would be forced to leave the Libra Association.
This is not a good sign. First off, Facebook is the initial creator of the Libra Association, so to step away from its own creation like that really doesn’t look good. It suggests not only weakness, but a lack of confidence in what one has built. So, regulators are giving you a hard time… For the most part, every blockchain or cryptocurrency startup has had to deal with regulatory fear. What makes Facebook and Libra so special?
Look at businesses in New York, for example. When the BitLicense came out in the year 2015, many felt that the document was set to stifle innovation. Many crypto and blockchain executives felt that the BitLicense was unfair to digital currency businesses, inciting heavy fees and all kinds of other barricades that otherwise made it difficult for these companies to get off the ground or even operate in New York and New Jersey.
What did a lot of them do? They didn’t close shop for good or give up. They simply stepped out of New York. They said that while they would continue to do business in the U.S., the Big Apple would be excluded. It wasn’t a pretty picture, but for a lot of these companies that were just starting out, they simply didn’t have the money, time or resources to devote to New York-based operations that saw them adhering to the BitLicense’s every rule.
In the case of Facebook, it could be argued that leaving the Libra Association is the same as throwing in the towel, as it likely wouldn’t be involved with Libra at all. So, regulators are giving you a hard time? Suck it up! If you truly believe in what you’re doing and think it could change the world for the better like you say, perhaps the time has come to fight back a little.
Leaving So Soon?
Nevertheless, it doesn’t look like Facebook has that kind of steam, and if Facebook leaves the Libra Association, that would really say a lot about where the currency is going. Thus far, several other companies have departed from the Libra Association including Visa, Stripe, Mastercard and PayPal, the latter being the biggest exit the company could have imagined.
PayPal, at one time, was Libra’s biggest supporter, losing exec David Marcus to Facebook’s blockchain division. The exit of PayPal says a lot, but the exit of Facebook – which started the Association – could spell Libra’s doom for good.