Libra was supposed to change — deftly, elegantly — the way the world paid for things. Overnight, well-meaning engineers and slick marketing would usher in a “more inclusive financial system” and uproot thousands of years of human behavior and a fundamental source of trust in our society.
Facebook would cease to be the company that merely brought people together online and begin to be the connective tissue that would unite the world’s consumers with the world’s companies, and eliminate those pesky barriers put up by old, stodgy institutions. Fascinatingly enough, Facebook seemingly sweet-talked those same institutions into being fundamental partners to the effort. In a PR coup at the time of its launch, Libra boasted a venerable list of purported backers, including some of the very people they were planning to disrupt, including: Mastercard, Visa, PayPal, Uber, and Vodafone.
The story sold, and like magic Silicon Valley marketing was willed into existence. Until it wasn’t. Not weeks after the project triumphantly launched, Maxine Waters shot it right down in her cowboy hat, Jerome Powell turned his nose up at it, and Mario Draghi flicked the central bank equivalent of an eye roll. And then rumors bubbled up over the summer that, instead of being partners, the fancy feathers in Libra’s crown were actually just non-binding agreements, the business world equivalent of a Tinder date.
Reporting from the FT that Libra’s major backers are looking to cut their ties (before the project runs entirely off the rails) raises two important questions for Facebook. The first is obvious. The second is insidious. Both are important.
First, will Facebook be able to convince anyone that it can do anything else than be a (harmful) social media platform anymore? Given the other fires that it is fighting from Washington to Brussels to everywhere, it may have to spend the majority of its time convincing people that it can clean up its core social media business before anyone can trust a bruised business with anything else.
More important is the second question: can its corporate advertisers, partners, and sponsors trust Facebook with their own reputation anymore?
Facebook was able to build important partnerships with blue chip companies, banks, and other digital leaders to lend support to its moonshot cryptocurrency project. But now that the project inches closer to death, and regulators across a wide political and geographic spectrum add accelerant to Facebook’s burning platform, Facebook’s biggest crisis might come from the product that never materialized rather than the one that is still sputtering along.
In the process of launching Libra in such an arrogant and half-baked way, Facebook bamboozled some of the world’s most valuable companies into believing it was capable of driving systemic change. Now that it’s clear that it can’t, the experience of Libra could cast serious shadows over Facebook’s credibility with its most important partners, advertisers, and business customers.
Sure, the company can push through angry users, and might be able to survive angry politicians. But can it survive angry CEOs and their budgets that drive Facebook’s profits as a public company?