
Visa, Mastercard, Stripe, and eBay exit Facebook’s Libra project - gkolli
https://www.theverge.com/2019/10/11/20910330/mastercard-stripe-ebay-facebook-libra-association-withdrawal-cryptocurrency
======
lucasverra
David Marcus update [1] :

Special thanks to @Visa and @Mastercard for sticking it out until the 11th
hour. The pressure has been intense (understatement), and I respect their
decision to wait until there’s regulatory clarity for @Libra_ to proceed, vs.
the invoked threats (by many) on their biz.

I would caution against reading the fate of Libra into this update. Of course,
it’s not great news in the short term, but in a way it’s liberating. Stay
tuned for more very soon. Change of this magnitude is hard. You know you’re on
to something when so much pressure builds up.

[1][https://twitter.com/davidmarcus/status/1182775728431087623](https://twitter.com/davidmarcus/status/1182775728431087623)

~~~
john_moscow
The fate of Libra isn't tied to Visa/Mastercard's withdrawal. It's ultimately
about whether there is a market for a new mechanism for international money
transfers.

As someone who runs a business that has (small) offices both in EU and North
America, let me share a quick overview of the current state of things.

When you want to transfer a non-trivial amount of money between 2 countries,
you have likely received it in the originating country's currency and are
planning to spend it in the destination currency. Now because you don't want
to pay ~3% currency exchange fees to your bank, the only reasonable way to do
this is to get an account with a business forex broker, that will offer you a
rate in the ballpark of 0.5% off the spot price. You will have to do the
KYC/AML [0], but the complexity of the whole transfer is basically this:

1\. Do a domestic wire to your broker's office in the originating economic
zone.

2\. Wait for them to call you and confirm the exchange rate.

3\. Receive a domestic wire from the broker's office in the destination
economic zone.

You often need to show the invoices/contracts showing the origin of the funds
and the purpose of the transfer, but if you are running a legitimate business
that pays taxes, you will need those for accounting reasons anyway.

Now the 0.5% fee charged by the forex trader (that is bound to a bunch of
rules and regulations making it harder for it to run away with your funds) is
not worth putting your trust into a fully automated distributed ledger, where
a lost password or a hacked computer could permanently eat away your money
without any legal recourse.

So the only potential audience of a new international coin would be people
actively trying to evade KYC/AML and that's exactly why the governments will
do their best to prevent it from getting adoption (which is very easy since
you can outright ban the fiat endpoints in your jurisdiction).

On the other end, there's a bunch of people who have never written a response
to an AML inquiry and have hardly done any business outside of their own
state, that are hoping to get rich quick by grabbing a stake at something they
haven't fully researched and later reselling it at a profit to someone who
will actually need it. I wouldn't see any reason for it to be successful long-
term, sorry.

[0]
[https://en.wikipedia.org/wiki/Know_your_customer](https://en.wikipedia.org/wiki/Know_your_customer)

~~~
lyqwyd
What do you consider non-trivial?

I transfer money to Africa on a regular basis, and I don’t have these same
issues other than the difference between published exchange rate and realized,
which is about 1-1.5%. Transfer fees are minimal.

I transfer about $3,000 per month, but no I could go up to at least $10K
without issue. Occasionally it can have a bit of a delay, but normally it
closes in less than a minute, and I get email and text updates on the status,
no calls needed.

~~~
trakout
Which service, something like transferwise?

~~~
kevinyun
I recently tried helping someone transfer $10k from US to different country.
Only after signing up, filling in all the details, and going through the
entire process, was there an error message that showed a Max of $800 could be
transferred.

I then just advised to use their local bank's wire transfer, which they had to
visit in person at the local branch, as they had originally intended.

Nowhere in my Google searches and Transferwise articles did I see any
limitations upfront. Nor did I figure out how to raise these limits after
searching post-filling-out-everything.

Very disappointed to say the least. But if anyone knows if I can raise the
limit, would be happy to try this again.

~~~
sumedh
Is this some account specific limit or a country specific limit?

------
lacker
I hope this doesn't cause Facebook to give up on Libra.

I personally have no desire to own Libra. But traditional bank accounts kind
of suck as a product and I would like to see more tech companies competing
with them.

The problems with bank accounts:

1\. They charge you fees for things

2\. They try to upsell me stupid financial products

3\. They are not easy to use in other countries

4\. Typing in my credit card number sucks

5\. Typing in my credit card number isn't secure

None of that has really gotten any better in the past ten years. It feels like
banks have mostly given up on making their product better. Instead of
improving their product, they just buy more expensive retail locations.

I would probably rather use a financial product produced by Google, Microsoft,
or Amazon than a financial product produced by Facebook. I just don't want the
rules to end up being, big tech companies are not permitted to compete with
crappy banks.

~~~
NeedMoreTea
Do you _really_ think a Facebook currency is not going to charge fees and
upsell you left, right and centre the first moment they think they can get
away with it? That's as well as targeting advertising and selling data of your
spending patterns.

~~~
lacker
It's not that I think the Libra product is going to be fantastic per se. I
just think that competition will force all the companies to make their
products better. I don't want the government to prevent companies from making
products, I want to be able to choose of my own free will whether it's a good
product or not.

~~~
NeedMoreTea
My difficulty is, at heart, I don't want my tokens of exchange to be a
_product_ at all. I want the guarantee of universality that comes with money.
Accessible to rich and poor alike, good credit or bad. Anything that tries to
edge that out via the market is inherently a bad thing. Ultimately for all
except stockholders. A central bank backed cryptocurrency with all the traits
of universality and legal tender may be a better bet...

I am fully in favour of the various new banking services and apps that are
springing up, services to manage, transfer, save and invest better etc. That's
an appropriate place for the market. Even there it's needed regulation to
ensure the most marginal in society can get a basic bank account, or not get
stiffed on fees.

~~~
bobbyd3
^ this

------
aazaa
> A Visa spokesperson told The Verge. “Visa has decided not to join the Libra
> Association at this time,” the spokesperson said. “We will continue to
> evaluate and our ultimate decision will be determined by a number of
> factors, including the Association’s ability to fully satisfy all requisite
> regulatory expectations.”

I suspect the regulatory pushback was the least of the problem. These
companies (and PayPal) have everything to lose and nothing to gain by helping
to advance Libra. The entire business model is to capture value from financial
system friction. Eliminating the friction eliminates their reason for being.

It's a classic innovator's dilemma: the action that will save these companies
is building the thing that will destroy their business models. They can't do
it because established companies are set up to eject people persisting with
such notions. That leaves the field open for an out-of-left field solution
that does away with the friction and the business models it spawned.

The source of the friction is regulatory. AML. KYC. All the laws that deputize
financial institutions as extensions of law enforcement. It's quite expensive.

The only way to eliminate the friction is to eliminate the regulatory
liability. And that's what has been happening with Bitcoin for some time.

What is surprising was that these companies ever lent their names to the
project in the first place.

~~~
pmarreck
Open-source cryptocurrencies that (ideally) no single entity mainly profits
from, are still the future, IMHO.

I don't get why people would get excited about Libra who weren't already
excited by some other cryptocurrency.

Violate an arbitrary rule in financial institutions? Guilty until proven
innocent. (I have real-world experience, here)

Violate an arbitrary rule in crypto and... oh wait, crypto doesn't have rules
and doesn't judge your morality. (Neither does cash or gold, so be careful
about using this as an argument against it.)

~~~
lmm
> Violate an arbitrary rule in crypto and... oh wait, crypto doesn't have
> rules and doesn't judge your morality. (Neither does cash or gold, so be
> careful about using this as an argument against it.)

The argument goes through just the same? Cash, gold, cryptocurrencies and
bearer bonds are all popular with criminals and crazies.

------
john_moscow
Call me cynical, but the whole idea of Libra would be disruptive to the
existing international payment businesses, such as the ones that just exited.
So the only reason for them to join in the first place would be to basically
"know your enemy" \- make certain you get the first-person intel on the
project's vitals and to know what to expect. Now that a couple of governments
made it clear that there would be roadblocks in deploying Libra according to
the original roadmap, it is no longer seen as a threat, so anyone without a
direct monetization interest (Facebook itself?) is going to leave.

~~~
snotrockets
And here I thought the whole idea of Libra is to take marketshare from WeChat
& M-Pesa.

~~~
jpwgarrison
Put more simply, it is about increasing total addressable market.

------
capocannoniere
I'd argue the outcome of this will be that Facebook will launch their own
payments infrastructure on top of WhatsApp. There was no need for crypto or a
Libra association to begin with.

According to the leaked Facebook all-hands audio, Facebook is already planning
to launch payments in Mexico by end of 2019
([https://qz.com/1719731/zuckerberg-confirms-facebook-
payment-...](https://qz.com/1719731/zuckerberg-confirms-facebook-payment-
tests-in-india-mexico-in-verge-leak/)).

I wouldn't be surprised if this goes extremely well for Facebook and WhatsApp
payments becomes WeChat Pay / AliPay for the rest of the world.

~~~
anonimouse5t43w
Just look at what Wechat is currently doing and you can get an idea of what
Facebook will be doing in the future.

------
CathedralBorrow
I wonder how much of this is companies distancing themselves from Facebook
rather than being purely about the cryptocurrency project.

~~~
Matthias247
On the other hand if it weren't facebook they likely would not even have been
interested in yet-another cryptocurrency. Especially if it's even not
available, but just a work-in-progress thing.

~~~
nostrademons
They've been interested for a while - Stripe used to accept Bitcoin, and
various Stripe employees have said they're watching developments in the space.
For that matter, a number of other big tech companies (notably Apple) said
they're watching the space.

I think the main issue is that cryptocurrency still has a few unsolved
research & regulatory problems (like how to handle more than 10 TPS, or how to
record taxes transparently) before it's ready for mainstream adoption. No big
company wants to take the risk that an unsolved research problem may not have
a solution, and so they wait and see how the space evolves rather than
committing large amounts of resources to it. (Other than FB, who has resources
to burn.) If it starts taking off they'll buy a bunch of startups and then
start throwing engineers at it; otherwise they risk nothing.

~~~
lawn
Cryptocurrencies do have scaling issues, but it's very easy to process more
than 10 TPS. Just because Bitcoin chose not to doesn't mean others cannot.

------
celticninja
The centralisation of Libra made it easy to kill. Bitcoin can be hampered but
not outright killed, at least not over night. A death by a thousand cuts is
the most likely solution but by no means guarantees Victory.

~~~
CamelCaseName
Bitcoin can be "killed" in the sense that it can become useless for the
99.99%.

Simply hunt down vendors who accept Bitcoin and organizations who facilitate
its exchange.

At that point, Bitcoin would be essentially dead as a rival to any currency.

~~~
capableweb
> Simply hunt down vendors who accept Bitcoin and organizations who facilitate
> its exchange.

This is commonly a argument for having drugs illegal too. "If we hunt them
down, eventually there will be no one left"

What we know now, is that making something illegal, could make it stronger. If
Bitcoin becomes illegal in most country, would the price go up or down?
Suddenly there is a black market, and opens up a whole other can of worms, so
governments might not be able to simply outlaw it.

~~~
rifung
> What we know now, is that making something illegal, could make it stronger.
> If Bitcoin becomes illegal in most country, would the price go up or down?
> Suddenly there is a black market, and opens up a whole other can of worms,
> so governments might not be able to simply outlaw it.

It's not as though drugs became _more_ popular because they became illegal.
Prices may have gone up because they were harder to obtain and there's less
competition. Demand was still there because.. well people like doing drugs or
are addicted to them.

With Bitcoin, why would a business risk legal action to accept it? There's
very little incentive as far as I can tell.

~~~
rmilejczz
But they didn’t become less popular either, and instead continued to rise and
grow in popularity. That’s the point, outlawing it won’t stop it.

If bitcoins were illegal then I imagine they would probably only be used in
illegal transactions.

~~~
kebman
To clarify: Necessarily, if Bitcoin was illegal, any transaction with it would
of course be illegal. :p That isn't to say that any and all transactions made
with it, would be for the exchange of illegal goods. You can of course also
use Bitcoin for the exchange of _legal_ goods, but taking Bitcoin even for
legal goods, would hence be illegal. In any case, just like people speeding,
drinking moonshine, or enjoying marijuana where it's not allowed, I'm just as
sure that very few would care.

------
justinzollars
I'm actually kind of bummed out about this. I may not like FB, but I like the
idea of a digital currency backed by a floating basket of currencies.

~~~
echelon
Not one that isn't regulated and that is controlled by a company with a
penchant for walking the legal gray area line.

~~~
lazzlazzlazz
Let's remind ourselves that the entire point of the Calibra organization from
which these companies have withdrawn their applications is to decentralize the
governance of the coin.

Facebook would _not_ have unilateral control by any stretch of the
imagination.

~~~
throwaway_law
>Facebook would not have unilateral control by any stretch of the imagination.

At minimum they are the registered owner the Libra federal trademarks...that's
a funny first step for a "decentralized" project. Satoshi Nakamoto never
trademarked bitcoin or blockchain for that matter.

------
CodiePetersen
I'm actually glad it's dead/dying. It was always going to be controlled by an
elite group who answered to no one but themselves. They had the ability to
monitor all of your transactions and if they didn't like you they could roll
back or block your transactions.

People keep saying oh this is proof crypto can't ever work because government.
This was never a true crypto currency. It was just a private ledger tracking
where actual money went. It was a stable coin at best. Its centralization is
what got it killed.

~~~
xabotage
>They had the ability to monitor all of your transactions and if they didn't
like you they could roll back or block your transactions.

Unlike, what, my established credit card company which still blocks me
randomly when I'm traveling overseas even when I explicitly call their 800
hotline, sit on hold for 30 minutes, and tell some unempathetic worker "I'm
overseas, don't block me"? Yes, thank goodness libra is dying, otherwise there
might actually be some innovation against the exact things you just mentioned
which perfectly describe the current state of affairs.

(Edit) I think it's fair to not trust Facebook with your currency, but keep in
mind the players in the current system (governments, Banks, and credit
companies) have hardly proven more trustworthy.

~~~
SkyMarshal
_> Unlike, what, my established credit card company which still blocks me
randomly when I'm traveling overseas even when I explicitly call their 800
hotline, sit on hold for 30 minutes, and tell some unempathetic worker "I'm
overseas, don't block me"? Yes, thank goodness libra is dying, otherwise there
might actually be some innovation against the exact things you just mentioned
which perfectly describe the current state of affairs._

You should just get a new credit card or bank, whatever you're using is really
out of date. Most modern cards and banks have websites or phone apps you can
submit a travel notice on. Takes all of 2m and prevents you getting blocked
for charges in that country.

~~~
mark_l_watson
Or, get an American Express card. I got one four years ago and then went to
Singapore for a consulting gig. I called them to let them know where I would
be and was told to please not bother, that they expect their customers to
travel.

I was also really please last month to notice that Capital One didn’t charge
international transaction fees when I was in Canada.

------
jtms
There was absolutely no reason for this to project to exist. The only feature
of digital currencies that make __some __of them interesting is that they are
fully distributed and based on absolutely zero trust of other users on the
network. What Facebook was trying to do here was take something that could be
implemented in a standard centralized database, stick some marketing on it,
and try to ride a hype wave that has since (rightfully) died down.

~~~
southerndrift
How else can facebook prevent people from moving on to wechat with its
internal payment system? Why should people stick to facebook if wechat can
offer a whole bunch of services that need (micro) transactions?

~~~
vertex-four
Facebook can have an internal payment system that uses local currencies. There
is no reason it needs to create its own currency, except as a power grab.
Building out a Paypal clone is fine enough.

~~~
repolfx
How can it be a power grab, Libra was going to be at least an open system with
it's own wallet protocols and market for implementations. A WeChat style
system would be totally closed from the ground up.

~~~
vertex-four
No, it was going to be open to partners that Facebook picks and chooses. It
was very specifically not to be a fully decentralised blockchain, which
essentially means it's actually a big permissioned database, which the
database owners get to control.

------
jeremyjh
It looks like a misstep followed by a hasty and ignominious retreat because
thats exactly what happened - no one anticipated the reaction from lawmakers
and rules agencies.

Its kind of hard to see this from the perspective of people who follow tech
and HN, but Libra really may have been the first occasion that the possibility
of crypto as anything other than an investment instrument - e.g. an actual
usage as currency - penetrated the awareness of top national political
leadership. Yes the ICO's got some attention but in many ways that attention
seemed to suggest that crypto would be tolerated. And probably it will be, as
long as it is simply another category of asset.

It will not be tolerated as currency, and governments will destroy any crypto
that threatens to become one. For now, BTC is safe because its usage as a
currency is minuscule and threatens no one. If it were to become successful,
it will be destroyed. I've always known that was a possibility but now I'm
sure of it.

~~~
JumpCrisscross
> _no one anticipated the reaction from lawmakers and rules agencies_

 _Everyone_ should have anticipated that reaction. Finance is filled with
smart people trying to pull fast ones. Regulators and lawmakers are sensitive
to being blindsided, moreso with anti-money laundering.

The moment I saw the announcement I knew they screwed up. So did everyone in
D.C. who isn’t selling blockchain consulting. It was hamfistedly introduced by
the wrong people (Facebook) at the wrong time.

~~~
repolfx
That's a very D.C. mentality. In law there isn't meant to be a "wrong people"
or "wrong time". Either something is illegal, or it's not. But the rule of law
is very weak these days, especially given the huge bloat of regulations on the
book in America related to AML.

------
twright
I wonder what would have happened if Facebook had simply announced Libra and
released it a week later. Would the legislative backlash have been stronger?
Or would the quick release bring to light the (always preached about but not
always demonstrable) advantages of cryptocurrencies.

I'm not (yet) doubting that Libra will eventually be released, but I can see
it being shutdown before or sometime after release.

~~~
FillardMillmore
I think the legislative backlash would've been much stronger, and I have
nothing to back this up so take it with a grain of salt - just my opinion.

Considering the many negative press stories about Facebook concerning things
like privacy rights, I don't think Facebook would take a risk like that to
begin with, but if they did, the US government would likely want to make an
example out of them to deter future companies eager to act first and ask for
permission later. Especially when it comes to something like this that could
very well disrupt global currencies. There would be many ensuing battles of
litigation and I would imagine the cost for Facebook, if they truly held
steadfast in support of Libra, would be quite tremendous.

------
shakkhar
I have no interest in Libra, but the fact that government basically bullied
these companies out of this initiative is alarming. If the regulators think
that they should scrutinize these companies deeper, being involved in Libra
should not matter. It's like saying, "withdraw from Libra and we'll continue
to look the other way on your sketchy non-Libra activities".

~~~
repolfx
Regulators have very little to do with how law is meant to work in theory,
especially in the USA. Financial regulators are pure extensions of arbitrary
government power: they can make up new laws on the fly without Congress, and
many rules are phrased vaguely enough that anyone could be violating them if
they want it that way.

Basically financial regulators can fine or imprison anyone in the financial
system at any time for any reason or even no reason, unaccountably so. Not
surprisingly this power gets abused. These firms were told they would be
attacked and punished for working with Facebook, so of course they baked away.

------
alibert
I guess that why one of the first investor in Libra - famous Xavier Niel -
published this editorial [1]

(small reminder for people who don't know him, he created the ISP french
"Free" that kind of totally changed the telecom market in France (DSL and
mobile), he also owns Scaleway (cloud), Kima Ventures (VC))

[1] [https://www.theblockcrypto.com/linked/42886/libra-is-
inevita...](https://www.theblockcrypto.com/linked/42886/libra-is-inevitable-
better-to-embrace-it-says-its-investor-a-french-billionaire)

[2] Original : [https://www.lesechos.fr/idees-debats/cercle/europeens-
libra-...](https://www.lesechos.fr/idees-debats/cercle/europeens-libra-nous-
de-choisir-1139165)

~~~
baby
He also completely disrupted/killed the monopole that existed in
telecommunication. Giving French people absurdly cheaper phone plans.

------
lifeisstillgood
I honestly don't see how to reconcile two desirable aspects of digital
currency

\- Frictionless, fee-less digital transfer of a medium of value. To be able to
transfer money natively over the internet.

\- To keep it _secure_ for 7 billion people - reversible, auditable etc - the
benefits we have of a curated financial system.

I am sure there are lots of reading on this available - but those two do seem
incompatible

~~~
swift532
You achieve the first by having a distributed, decentralized, fully censorship
resistant base layer in which the rule set is more or less like the current
Bitcoin rule set.

You achieve the second by building upon this base layer. Just like how in the
real world the base layer is physical transfer of cash and assets (not very
reversible), and we have a financial and legal system built upon that (to
simplify, it's doubtful how relevant physical transfer is any more).

~~~
tsimionescu
But the only way to do the second is to keep a separate 'ledger' associating
real people/companies with network wallets, and to ban the use of wallets
whose ownership is not known.

And this automatically brings back a lot of hassle with verifying paperwork,
it again allows people to be barred from the network, and it again prevents
people withput paperwork from owning currency.

------
vbo
I'm puzzled by HN's attitude towards Libra. I can understand being wary of
having Facebook run the world's money and how a metacurrency such as Libra
could break world economics as we know it, but I can't help be excited about
the prospect of widespread digital money usage and FB is one of the few
companies that can drive that. Perhaps HN draws its animosity towards Libra
from all the cryptocurrency shenanigans of the last few years, but given this
community is comfortable with innovation and risk, I would expect HN to be
imagining usecases and scenarios for digital money rather than dismiss the
whole concept based on emotion related to Facebook and/or cryptocurrencies.

If the world does move ahead with central bank issued digital currencies - and
it seems there's a lot of chatter in that area - then a metacurrency will no
doubt pop up at some point anyway. Because that's what I expect hackers will
find fascinating and because it will suddenly become possible. So we'll get
Libra one way or another, but it may not be Facebook's.

A full fledged digital currency ecosystem will be incompatible with the status
quo to a large degree, but that's no reason for dismissal. Doesn't all
innovation challenge the status quo? Ultimately, the cat it out of the bag and
the question is not if, but how digital scarcity, whether trustful or
trustless (or a mix of the two), will impact our definition and use of money.

We'll have to ensure AML rules evolve to fit the new paradigm and that's fine.
But we shouldn't look at existing AML frameworks and refuse innovation because
our solutions for the past don't fit our possibilities for the future.

And regardless of the outcome of Libra, Facebook is making huge inroads in
prompting conversations and ultimately regulating digital money, which in
itself is a huge win. Given the negative govt and public reactions and their
standing ground on the matter, they're doing it at their own expense and I'll
give them kudos for that. I don't see any of the existing forces in the
finance ecosystem do anything close to this.

Money and payments have stood still amidst the digital revolution. Imagine
micropayments for consuming online content and how they could address some of
the biggest issues prompted by the attention economy. The likes of visa and
mastercard could've made this a real at any moment in the last 20 years or so.

I welcome anyone trying to do something bold. It's progress, regardless of the
outcome of any specific project.

~~~
CJefferson
My fundamental issue is simple. Money, who owns it and how it moves around, is
fundamental to our society. I don't want that power owned by a company who
might decide one day, without warning or reason, to close my account.

~~~
buboard
You can take a company to court, but not a government. Imagine being a
legitimate venezuelan businessman with an account in the US for example.

Money is sort-of fundamental (it's one tool), and that's more so because
today's fiat money is powered by guns. In the past, europe would have a
multitude of coins being used concurrently with some of them dominating like
the Florin. Its a recent development that governments crack down on the money
that people use.

~~~
foepys
You can absolutely take a government to court. What are you talking about?

~~~
buboard
Even if you can you re guaranteed to lose because the govt makes its own laws

How would that work with VZ?

------
speedplane
I don't like Facebook, but I do give them credit for being very smart. They
managed to lock a billion eye-balls on their platform and that doesn't happen
automatically.

That's what makes this whole Libra thing so shocking. I just can't believe
Facebook would be so naive to just shout "digital cross-border currency" and
then expect everyone to cheer them on. Bitcoin has been around for years, and
controversies surrounding it are well known. PayPal has been around for
decades and everyone understands the potential of electronic payments.

The fact that Facebook did not expect this ambivalence / skepticism and
address it upfront is a pretty surprising misstep.

------
narrator
If Facebook wants a currency they should start a country. Given that they are
an organizing platform for various insurgent groups... I could almost see the
headline: "victorious insurgent group 'ZucLiberationFront' agrees to partner
with Facebook to run their country's currency system using Libra. Reasons
cited were gratitude for free Facebook advertising that helped them recruit
rebel fighters"

------
dana321
Isn't it kind of pointless anyway: a large corporation with vast resources
creating a cryptocurrency, why don't they just make their own bank?

~~~
wolfgke
> Isn't it kind of pointless anyway: a large corporation with vast resources
> creating a cryptocurrency, why don't they just make their own bank?

Because Facebook senses an opportunity that in the long-term they could make a
lot more money than if they founded a bank.

------
csomar
I see this is starting to playing out as I'm thinking it should play out*.
Now, I'm waiting for Facebook to stick to its gun. 2020 will be an interesting
year.

x-
[https://news.ycombinator.com/item?id=21162607](https://news.ycombinator.com/item?id=21162607)

------
dnprock
I think given enough time, Libra project can succeed. But it has to jump
through many hurdles. It will require a lot more investment than Facebook
anticipate.

I advocate for a new type of crypto: digital native and decentralized
stablecoin. By adding a constant inflation rate, coin price can become
somewhat stable. The tradeoff is worthy for permissionless, digital native and
decentralization. I outline the benefits of this new type of cryptocurrency in
this article:

The Next Big Thing in Crypto: Using Inflation to Create Stablecoin

[https://bitflate.org/post/2019/10/10/the-next-big-thing-
in-c...](https://bitflate.org/post/2019/10/10/the-next-big-thing-in-crypto-
using-inflation-to-create-stablecoin.html)

------
Lucadg
I don't like Libra but I wouldn't dismiss it just yet.

\- Governments: We'll ban Libra.

\- Facebook: Let us do Libra and we'll give you access to the financial
transactions which otherwise would go dark with Bitcoin or Wechat.

~~~
tsimionescu
\- Governments: oh yes, we'll trade our ability to set monetary policies for
the off-chance that someone who wanted to hide from regulators will choose to
trust Facebook with their shady transactions, and will continue to do so after
the first time we catch them in the act based on data Facebook provided to us.

~~~
Lucadg
\- Facebook: you are going to lose the ability to set monetary policy anyway.
That ship has sailed.

------
mark_l_watson
I wonder if this was government pressure. I think it was only going to be 50%
denominated in US dollar. Making it easy to effectively (partially) transact
in other currencies must not have gone over well.

EDIT: I assumed that Libra would be for many, many small transactions so
banking know your customer KYC regulations imposed on banks in all countries
by the US and other governments would not really apply. Also, does something
like Apple Pay also fit the need for people paying people in other countries
small amounts of money?

------
mrmcd
In other words every actual payment company didn't want to get a colonoscopy
from every regulator on Earth for Zuck's Spruce Goose hobby.

------
jacquesm
Why was Stripe even in it in the first place?

------
kerng
I found it interesting that Visa and Mastercard were actually on board in the
beginning. Might have been some fear of missing out on something novel and
important (especially since competitors joined Libra also). Now that the
initial dust and Libra is a bit better understood they are seemingly jointly
pulling out.

------
keymone
I hope Facebook manages to launch Libra and that’ll be the final trigger for
regulators to chime in, slap them on the wrist and break up all the giant
corps. The degree to which they are invading our privacy and are greedy for
power and control over people’s lives is beyond scary.

------
undefined3840
Other than eBay, guessing the reason why the payment cos are dropping out
first is because they have the highest regulatory/compliance burden as is, and
don’t need more scrutiny dealing with something they don’t even fully
understand just so they can win some brownie points with FB.

~~~
kbenson
Well, Ebay owned Paypal until they spun it off again. Perhaps the execs still
have nightmares about dealing with financial regulations (or trying to walk
the line so they didn't have to) and don't want to deal with it again.

~~~
xemdetia
I'm more of the opinion that there was a Q2/Q3 deadline to get some sane
regulatory framework by the Libra team and they just whiffed on it or it was
wholly insufficient for normal international banking standards (which was
probably laid out by all the parties that left). The fact that everyone seemed
to bail all at once sounds like there was just a lack of commitment/slipped
deadline by the Libra side. Generally as a new thing is being stood up under a
regulated framework there is some slack provided to get the ship in order
while other interested parties look on, but at a certain point major
requirements must be done. If you are one of the interested parties and it
doesn't look like the other side is making sane progress, the hammer drops
swiftly.

------
elmar
Pegging Libra to just the Dollar could soothe regulators, a16z says

[https://techcrunch.com/2019/10/11/libra-denominated-in-
dolla...](https://techcrunch.com/2019/10/11/libra-denominated-in-dollars/)

~~~
JumpCrisscross
> _Pegging Libra to just the Dollar could soothe regulators, a16z says_

Baskets of currencies are nothing novel. The problem goes down to whether this
is a Facebook-controlled currency (which is troubling, given Facebook’s track
record) or a nobody-controlled currency that Facebook profits from (which is
troubling, given the money-laundering concerns).

------
Zetaphor
Notable that OP left Mercado Pago out of the headline, despite it being in the
opening sentence. Mercado Pago is the largest payment provider in South
America. In case you forgot, South America is the fourth largest continent and
contains 12 countries.

------
ur-whale
Interesting to ee Nick Szabo actually answer David Marcus tweets.

[https://twitter.com/davidmarcus/status/1182775728431087623](https://twitter.com/davidmarcus/status/1182775728431087623)

------
haylel
I'm sure Libra would be useful for payments / economy inside Facebook Horizon.

------
ufo_kid_zero
“If you take this on,” the letters read, “you can expect a high level of
scrutiny from regulators not only on Libra-related activities, but on all
payment activities.”

I wonder who paid them to say this?

------
chillacy
In 6 months: Visa Mastercard Stripe and Ebay create new stablecoin

------
wpdev_63
facebook would better service itself by help small businesses in timely
transactions of cryptocurrencies. With the government debt project to go to
$30 trillion within the decade there will be alot of people hedging against
the dollar with cryptocurrency and whoever is able to help in transactions
with mom and pop stores will make a fortunes. Also it does help you aren't
_directly_ competing with the federal reserve. People have been killed for
less.

------
buboard
I wonder why Stripe followed them? They re positive on crypto in general, and
they would have an immediate competitive advantage if they stayed

~~~
vinniejames
Because politicians threatened them with increased regulatory scrutiny across
all of their business

~~~
buboard
It s possible that the benefit would outweigh the risk - after all they are
already in the payments busines and know how AML works etc. They 've done it
for bitcoin. So, i would assume they were threatened a little less politely
than i imagined.

~~~
vinniejames
Threat letters from the Senate:
[https://www.schatz.senate.gov/imo/media/doc/Signed%20Letters...](https://www.schatz.senate.gov/imo/media/doc/Signed%20Letters%20re%20Libra%20to%20Patrick%20Collison,%20Ajaypal%20Banga,%20and%20Alfred%20Kelly.pdf)

~~~
buboard
What a joke of a letter. "But think of child abuse". I can't believe they
linked libra to child sexual abuse ... how would that even work?

Didn't they admit last week that facebook's own detection algorithms are far
better at detecting child abuse than anything else? How does that work.

------
wpdev_63
damn shame with the dollar approaching a $30 trillion dollar deficit within
the next decade[0], it would be very prudent to invest into a competitor.

[0]:[https://www.zerohedge.com/news/2018-02-12/trump-budget-
sees-...](https://www.zerohedge.com/news/2018-02-12/trump-budget-sees-us-debt-
hitting-30-trillion-2028)

------
Yuioup
I guess that's it for Facebucks

------
rajacombinator
Major punt by Facebook like many others like Oculus. But you nail one like IG
and it’s all good!

------
equalunique
One would think Facebook's Libra was a country sanctioned by the US.

------
FailMore
I think FB should take a lesson from this - be less respectful. They have done
everything not to tread on anyone's toes, but that is not what innovation is
about. They have the userbase and the ability to give this a shot all on their
own. Do it and make something great, then deal with the consequences.

------
elif
No surprise. The revolution will not be international clearing housed.

------
mesozoic
And the end of the world pushes a bit further away

------
buboard
Wow .. they re bound to see some competition.

------
azizul8692
playstore game purchases

------
MH15
That was quick.

------
WouterZ
Tst

------
dwoozle
Well, this died.

------
raister
I guess people had issues of the currency being used to all sort of illegal
things, e.g., human enslaving, human organ trafficking, and so on...

~~~
jasoncartwright
If this is true, then it was true when they signed up initially. What changed?

~~~
raister
Because raw ideas seem good, then when people ponder it may turn out to be bad
ones... Have you ever heard of the Solar Powered Highway in France?

~~~
wolfgke
I have quite some difficulties with the mentality of first very publicly
announcing that you will join the project, then very soon realizing that it
might be a bad idea, and then (also quite publicly) exiting the project.

Why not evaluate this beforehand before very publicly announcing that you join
the (Libra) project?!

------
dagaci
The current financial system worldwide looks quite suspect right now, negative
interest rates could soon become a new norm in the EU even officially in
retail. Most importantly political leaders in the US(and EU) have scaled up
their massive money-printing schemes designed to keep their banking-financial
overlords in business.

With that in mind, the very last thing the EU and US authorities want is for
the people who (mostly unwittingly) underpin the actual value to have an Exit
from this type of controlled use of inflation into an alternative currency
backed by say gold and other hard to inflate commodities, because allowing any
significant amount of that.. (remember the true impact is inverse of the real
fractional-reserve in play) would lead to a collapse in the power of the
existing political-financial hegemony.

