What should we make of Facebook’s sudden foray into the world of digital money? Just as regulators were beginning to wake up from their self-induced coma to discover that Facebook has grown too fast and too big for its own good, the company has decided to redouble its unbending commitment to “moving fast and breaking things”. The good old days when Facebook was merely breaking privacy and elections are now gone – and we’ll surely miss them. But how could they compete with the chance of breaking – once and for all – the global financial system?
To that end, Facebook has announced Libra, a currency, an infrastructure, a network – an ambiguous digital entity capacious enough to be everything for everybody, and with the noble cover of a .org domain to boot. It’s the ultimate Schrodinger’s cat of the digital economy: a blockchain/non-blockchain, it will serve as money/non-money to save/bury Facebook/all of us.
The specifics of how this amorphous project will operate are somewhat scarce but one can still discern its overall aspiration. It would enable users, especially those who are unfortunate enough to lack a bank account but fortunate enough to have a Facebook account, to convert real money into Libras, to deposit it virtually, to send it to others or to simply use it to pay for services.
Facebook is framing the venture as humanitarianism: Libra is here to help the world bank, not strip the world of its remaining assets. Thus, for every Uber and Mastercard that have joined Libra’s association as partners (at the “small” cost of $10m per company – apparently, the era of “free” online stuff is over too), there are also not-for-profit groups like Mercy Corps and Women’s World Banking that lend today’s financial and digital capitalism a humane, even smiley face. Without this not-for-profit contingent, the Libra Association would look more like an innovation-friendly crime syndicate – just look at the total number of recent court cases involving Uber, Mastercard, and Facebook alone.
It’s tempting to misread Facebook’s move into finance as yet more proof of its infinite chutzpah and shortsighted arrogance. Is Libra just a clever way of spitting into the face of angry regulators? Where does Facebook find the courage to proclaim that it’s going to work with policymakers in order to “shape the regulatory environment” in a way that is conducive to its needs? No sane regulator would like to be seen to be shaped by anyone in Facebook’s orbit.