This is a segment of the Supply Shock Newsletter. Subscribe to read the full edition.
Six years is certainly a long time in ciphers. However, Libra (later Diem) may have felt at home in the comfort of the present US atmosphere.
At the time, Meta (still Facebook) had its own blockchain subsidiary, Calibra, which was pushing for launching a new type of cryptocurrency that was fixed in various Fiat baskets at floating values.
Calibra wallets are intended to be integrated with WhatsApp and Messenger, and have promised that users can actually send money to each other for zero fees. The token Libra was intended for use in e-commerce on Facebook.
Libra was styled primarily as a crypto-driven competitor for Paypal. Former Paypal president David Marcus led the effort, but rhetoric will often creep up.
Bitcoin “is not a good medium for exchange… (Fiat) currency is actually very stable and Bitcoin is unstable,” Marcus told Fox Business.
Reliability still represents something. The so-called Libra Association aimed to diversify responsibility for corporate supporters such as Facebook, MasterCard, Visa, PayPal and Uber, but the Senate Banking Committee was deeply concerned.
Certainly, longtime antagonist Sherrod Brown led the grill on this day in 2019. He’s not a Bitcoin fan either. However, the concept was that Facebook couldn’t trust users’ bank accounts (their finances) to handle finances at all abilities, particularly in light of the Cambridge Analytica scandal that broke the previous year.
At the time, Carolina Rep. Patrick McHenry, made it clear why Bitcoin was so innovative in the first place.
Mchenry hated the way Facebook drove iron on the railway to Iron Bella while Facebook was still in its conceptual stage. But when asked whether the US government could make alternative currencies like Bitcoin, Libra and stupid things thriving without strict guardrails, McHenry said this in the CNBC Squawk Box.
“Well, I don’t think they have the ability to kill Bitcoin. Even Chinese people could have killed Bitcoin with firewalls and extreme intervention in society… But there are different mechanisms for killing it, not fully distributed, not fully open.”