Four months after Facebook announced a “new currency,” Libra, the project is foundering. It’s no surprise that Facebook couldn’t create a currency out of thin air — because Facebook can’t create a currency.
Facebook’s business model is to smash traditional gatekeepers under the guise of facilitating individual empowerment and then take on the gatekeeper role itself. Money may be the last gate standing — but it should remain impenetrable for good reason.
Facebook CEO Mark Zuckerberg used the “empowerment” language in announcing Libra in June. “Libra’s mission is to create a simple global financial infrastructure that empowers billions of people,” he wrote.
The idea is that you can put money — Libras — into a “digital wallet” and use the Libras to buy things online and, eventually, in person, from vendors who accept Libras. But Visa and MasterCard, announced as partners with great fanfare in June, quit the venture Friday, following PayPal, and Congress has called Zuckerberg to testify about the scheme.
By definition, a company can’t create a currency, just as a company can’t create a military. No matter how well-armed your company’s security force is, it’s still subject — legally, if not always practically speaking — to a nation’s laws.
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