As Facebook’s Libra Loses Its Relevance, What’s Next for Global Payments?

The Libra Association has confirmed its original plans are now officially abandoned

Jason Deane
Apr 18, 2020 · 6 min read
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Image by Gerd Altmann from Pixabay

It’s no secret that I have never been a fan of Facebook’s ‘cryptocurrency’ project — dubbed ‘Libra’ — ever since it was announced on June 18th 2019. That’s less than a year ago and already the world is almost unrecognizable from where it was then.

But so, as it turns out, is Libra itself.

When the concept was released to the public, it came with enormous fanfare and boasted an impressive list of partners including PayPal, Visa, MasterCard, Stripe, Vodafone, Lyft, Spotify and Uber among others.

Bitcoin lovers hailed it as a positive as it would introduce more people to the idea of a digital currency which may act as an on-ramp to the flagship cryptocurrency, and Bitcoin haters equally embraced it because it was, well, simply ‘better’ than Bitcoin. However, I remain convinced that this latter group had probably never read the white paper of either asset since they were never designed to do the same thing in the first place.

However, there were many, including myself, who were troubled by the whole thing from the start. I genuinely tried to remain open-minded as I researched it, but it just didn’t sit well with me for reasons I couldn’t initially put my finger on. But it didn’t take long to find what those reasons were.

The first thing that struck me was the complete absence of any major banks, or other heavy hitters such as Apple Pay, Google Pay or even Amazon. Arguably Visa, MasterCard and PayPal were fair representation of payments systems, but it did seem odd that not one bank was part of the original 21 announced partners.

Next, was the idea itself. Cutting through the technicalities, Libra, through its Libra Association, was effectively positioning itself as a sort of new central bank, issuing currency according to a set of criteria linked with assets it held.

I’m prepared to give ten out of ten for concept, because, economically and financially speaking, why not? You’d effectively have a sort of ‘backed’ digital currency that could, in theory, be used on any global network, but most likely Facebook or Messenger, allowing simple payments to anyone at any time. On paper, it sounds plausible, even desirable. From a consumer’s point of view at least.

The trouble is, this could never work. No country on the planet is going to allow what is effectively a corporate group to ‘create’ new money in their jurisdiction or even allow money to flow around freely like this without some extremely serious conditions attached.

First, because monetary policy is managed by elected officials within each territory and not by a group of shareholder-reward-driven corporates, and second, because free flow of untraceable money is something we already know that governments and central banking systems really don’t like.

And therein lies the problem. If this was ever going to work, Libra would need full government support in every country it operated in, it would need to adhere to strict KYC and AML (Know Your Customer and Anti-Money Laundering) conditions AND would almost certainly need a myriad of banking and finance licenses to work, not to mention FOREX regulation. Where is the incentive for all this to be granted?

And even if they were, doesn’t that just make Libra another part of the same problem we had before anyway? Libra’s grand plans of ‘banking the unbanked’ can’t possibly be fulfilled because the very people who ARE unbanked almost certainly have that status due to the effect of those regulations to start with.

Mark Zuckerberg himself stated that he would not proceed with Libra (I thought this was an Association where all members had an equal vote?) unless he had the full approval of US regulators and I suspect this would have been impossible to achieve in Libra’s original proposed format.

The cynics argue (only half jokingly I suspect) that Zuckerberg may actually be able to ‘buy’ regulation with enough money and corporate pressure, but I’m not sure that makes any of us feel better for a whole different set of reasons.

And what happens if you upset Libra? Remember, this is a centralized permissioned system (ironically, the exact opposite of Bitcoin) despite the Association’s long term aspirations and promises to the contrary.

We all know of people who have lost years of hard work on sites like Ebay, YouTube and Facebook due to incorrect algorithmic applications and who then have no form of recourse because the company refuses to engage with ‘rule breakers’.

What if you had a few thousand dollar’s worth of Libra in your account and you made a political statement on Facebook that the Association didn’t agree with? Who’s to say they can’t freeze it or take it away? That power intrinsically exists in all centralized systems of course, such as banks, PayPal, Visa, etc and can’t be removed by the nature of its very being.

But if that’s the case, we’re back to the same question again: what’s the advantage to the user opting for Libra over using other systems that are already available?

Further, if Libra offers no advantage to users (other than possibly ease of use and integration if done correctly — and even that remains to be seen) and has an almost impossible task ahead in terms of jurisdictional acceptance, where exactly does it go from here?

This may well be the question that the Libra Association’s partners started asking themselves not long after the project was launched.

On October 11th 2019, Visa, Mastercard, Stripe, PayPal, Mercado Pago and Ebay all left the project, meaning that all US payment providers were out of the picture. This was followed by Booking Holdings on October 14th and Vodafone on 21st January this year. In total, almost 40% of the original members have now abandoned the project.

This week, what’s left of the Libra Association effectively presented a ‘new version’ of Libra, a watered down, less ambitious and, in my view, completely pointless tokenized central payment system based on a form of stablecoin. A PayPal/poor man’s cryptocurrency hybrid if you will. There is almost nothing left of the original grand plan, both physically and officially.

As far as I can tell, it now adds no value anywhere for anyone.

I should mention that people who know me either personally or professionally through my work know that it’s extremely rare for me to be outright dismissive of anything. The way I’m built forces me to find the positive in anything I am confronted with, no matter what it is, but I struggled here.

And I can’t deny — mainly because it’s so heavily documented — that I have been pretty scathing of Libra from the start. Not only did it seem both impossible and unnecessary, it seemed to rely on people’s lack of understanding of how it would actually work and, as such, had a sinister edge about it.

And to those people who are disappointed that it will not now happen in any meaningful way, I remind you that the world already has a vastly superior alternative that you — and in fact literally anyone — can use right now anywhere in the world with a 100% success rate.

And it’s name?


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Disclosure: The author of this opinion piece has been heavily involved with Bitcoin for several years and holds a substantial portfolio, including Bitcoin. He also has a mining operation running the SHA 256 algorithm based in Siberia and is a published author on the subject of promoting the understanding of cryptocurrency. Jason is an analyst at Quantum Economics.

Disclaimer: Investing in any asset class is risky. The above should not be taken as financial advice, nor construed as so. Always do your own research before investing or consult with a professional financial planner.

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Jason Deane

Written by

I blog on things I am passionate about: Bitcoin, writing, money, life’s crazy turns and being a dad. Lover of learning, family and cheese. (

The Startup

Medium's largest active publication, followed by +756K people. Follow to join our community.

Jason Deane

Written by

I blog on things I am passionate about: Bitcoin, writing, money, life’s crazy turns and being a dad. Lover of learning, family and cheese. (

The Startup

Medium's largest active publication, followed by +756K people. Follow to join our community.

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