The founder resigns and the progress is slow, can Facebook’s digital currency still succeed?

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Recently, there was a piece of news that was drowned in big news such as Tesla Battery Day and Oracle: Morgan Baylor, the co-founder of Facebook’s digital currency project “Libra” (Libra), has now left.

Baylor, who joined Facebook in 2017, was also the co-founder of the company’s Novi payment project (formerly Calibra digital wallet). It is said that Baylor is the main person who promotes the digital currency project within Facebook. At one point, she was alone in carrying the banner of Facebook’s blockchain development.

Seeing the important officials leave, how many people still remember the high-profile Libra coins in the past? What will happen in the future?

Brewing

On February 12, 2018, Silicon Valley investor and cryptocurrency technology expert Howard Wu was invited to Facebook headquarters to discuss the impact, opportunities, and risks of introducing blockchain technology to more than 2 billion online users.

However, it was not Facebook CEO Mark Zuckerberg or Vice President David Marcus who invited him. In fact, the person he met was Morgan Baylor.

Baylor has just joined Facebook for less than a year. In the first period of time, she was the sole person in charge of Facebook’s blockchain project, researching blockchain technology and exchanging opinions with industry insiders.

Thanks to Baylor’s efforts, Facebook began to attach importance to blockchain technology. In May 2018, the blockchain project was officially launched. Marcus, who was previously responsible for the Messenger application, also joined this new department, and together with Baylor, recruited other top talents within the company for the team, such as Kevin Wei, product director of Instagram. Wait.

Although after the public debut of the Libra project and Calibra digital wallet, they have been making public appearances for these two projects, publishing details in blog posts, participating in interviews, and participating in congressional hearings, but it is actually in the blockchain. In the community, everyone knows that Baylor was the first to promote the development of Facebook’s cryptocurrency.

Morgan Baylor

Debut

After a year of silence, the mysterious cryptocurrency project inside Facebook was dug up by the media. According to the media citing sources familiar with the matter, Facebook intends to launch a stablecoin-based payment platform. Prior to this, the company had secretly prepared for more than a year.

The internal code name of the project is “Project Libra”, which aims to develop a cryptocurrency that will facilitate quick transfer and online shopping between billions of Facebook users. At the same time, Facebook is also in contact with companies such as Visa and MasterCard, hoping to gain their support for cryptocurrencies.

On June 18, 2019, the official website of Facebook’s cryptocurrency “Libra” (Libra) was officially launched . The company stated that Libra will be managed by a global organization, the Libra Association. Facebook also released a white paper for Libra, detailing the cryptocurrency’s plans. At the same time, Facebook established a subsidiary “Calibra”, which will develop a new digital wallet that can be used in Facebook Messenger and WhatsApp, as well as independent iOS and Android applications.

According to the white paper, Libra’s vision is very bold and advanced: to create a new decentralized blockchain, a low-volatility cryptocurrency and a smart contract platform; to cooperate and innovate with the financial sector to jointly build a lower cost and easier Access to a more closely connected global financial system; establish a simple, borderless currency and financial infrastructure that serves billions of people.

Encounter obstacle

Facebook and Libra struggled through the second half of 2019 in an atmosphere of censorship.

At first, the market was very optimistic about Facebook’s entry into the cryptocurrency field. After the release of Libra, the company’s stock price rose 4.2%.

However, people soon realized that Facebook’s Libra currency seemed to be challenging the traditional global financial system. Facebook’s huge business empire has been daunting, and the company has lost user trust due to privacy issues. Is the Libra coin launched at this time reliable?

All of a sudden, the voices of criticism came one after another.

President Trump, who is still hostile to Facebook, said in a series of tweets that Facebook’s Libra coin was “untenable or unreliable” and that “if Facebook and other companies want to become a bank, they must be like Like other banks, first obtain a bank license and then comply with all banking regulations and so on…”

Fed Chairman Powell said that given people’s concerns about financial stability and consumer protection, Libra cannot be released rashly until Libra’s operational questions have been answered.

US Treasury Secretary Steven Mnuchin stated that he was “very dissatisfied” with Libra and added that Libra could be abused by criminals.

More and more US lawmakers and organizations are calling for the suspension of Libra development.

The Group of Seven (G7) announced that it will set up a working group to evaluate Libra, the Monetary Authority of Singapore is also learning more about Libra, and the European Commission also intends to initiate an antitrust investigation against the Libra Association.

David Marcus

David Marcus, head of the Libra project, went to Congress twice to testify. At the first hearing, he emphasized that “The Libra project is very important to the United States and can prevent the United States from falling behind other countries in the blockchain revolution.” However, Facebook, which has been caught in privacy and election scandals many times in the past, can no longer gain trust, leading the US to lead the blockchain revolution. The question “Why is it necessary to be Facebook?” has not been answered.

At the second hearing, Marcus said, “We will not launch Libra until the regulator’s confusion is completely resolved.” However, the answer the lawmakers hope to get is: suspend the development of Libra.

Three months later, Facebook CEO Mark Zuckerberg went to Congress to testify in person. Zuckerberg reiterated that Libra will only be issued after the approval of the U.S. regulatory authorities, and emphasized that “I do not control Libra.” But Zuckerberg did not provide a new answer based on the content of Marcus’s testimony on Libra in July.

In this view, the possibility of Libra coin launching in 2020 is getting lower and lower.

compromise

Under pressure, PayPal officially withdrew from the Libra Association in early October 2019. A week later, companies such as Mastercard, Visa, Mercado Pago, Booking Holdings, eBay and Stripe also withdrew from the Libra Association.

In order to gain regulatory approval, the Libra Association revised the white paper in April 2020, abandoning the original idea, and announced the issuance of a series of stablecoins backed by a single currency instead of a single stablecoin backed by a basket of currencies.

This adjustment means that the Libra Association made a huge concession to governments and central banks. As soon as the original plan of Libra was released, it attracted global scrutiny and siege, because people were worried that Libra would damage the monetary sovereignty of countries.

“Since the release of the original white paper, the Libra project has indeed caused important discussions around the world, such as’How do we properly regulate digital payments and digital currencies?'” said Dante Dispatt, vice chairman of the Libra Association.

A month later, the original digital wallet “Calibra” was also changed to “Novi”. Originally Calibra was a digital wallet built for Libra. Users can use it through Messenger and WhatsApp, and it will also be released as an independent App. But after the Libra project was blocked, Calibra is now renamed Novi. Facebook stated that Novi will require the use of government-issued IDs for verification, and the Novi wallet application will have a built-in “fraud protection” function.

After this series of adjustments, it can be seen that the Libra project will focus on creating a more traditional payment network, where the currency is linked to the local legal currency, a bit like the digital dollar in the PayPal account. Of course, Libra still has a stable currency backed by multiple national currencies, but its importance has declined.

Global expansion

Unlike the Libra project that was announced last year, the current Libra project seems to be less ambitious, and it seems that it has received less attention. Although the resistance of regulatory agencies cannot be completely eliminated, the Libra Association is still actively promoting market expansion and talent accumulation.

In the past few months, the Libra Association has been appointing strategic executives to prepare for global expansion and seeking opportunities in the e-commerce and digital payment fields. In August, Stephen Bennell, a former US Department of Homeland Security official, was appointed as the general counsel of the Libra Association.

In May, the association appointed HSBC’s chief legal officer and former US Treasury Secretary Stuart Levy as its new chief executive; in June, it appointed Sterling Dennis, the chief compliance officer of Credit Suisse’s financial crime compliance officer.

In September, the Libra Association appointed James Emmet, a former HSBC executive, as the managing director of Libra Networks.

But also in September, one of the co-founders of Libra, Morgan Baylor, who has been regarded by the currency circle as the original promoter of Facebook’s cryptocurrency project, suddenly announced his resignation. It is said that Baylor resigned because she prefers to participate in projects built from scratch, which may also explain why she chose to join the venture capital firm NFX after resignation-“In terms of investment, all contacts are built from scratch. “.

If you look at it from this perspective, does this mean that the Libra project has matured?

On the other hand, the release of Libra seems to be so far away. According to previous reports, Libra is scheduled to be released in the first half of this year. But now, there are only about 100 days left in 2020, and Libra seems to be getting out of sight.

The future is still full of uncertainty.

Perhaps, as in the disclosure information submitted to the US Securities and Exchange Commission, Facebook acknowledged that Libra may never be released; or even if it is released, this Libra is not another Libra.

The following is the detailed timeline of the development of the Libra project:

December 2017: David Marcus, former president of PayPal and vice president of Facebook’s Messenger application, joined the Coinbase board of directors.

May 2018: Marcus announced that he will be responsible for Facebook’s new blockchain department.

December 2018: There are reports that Facebook is developing a stable currency for WhatsApp transfers.

February 2019

February 4, 2019: Facebook acquires Chainspace, a smart contract developer.

February 28, 2019: There are reports that Facebook is developing a cryptocurrency that can be used between its different platforms.

May 2019

May 3, 2019: According to reports, Facebook is in talks with Visa and MasterCard to support its fiat currency-linked stablecoin, including seeking $1 billion in financing. The cryptocurrency “Libra Project” was first publicized.

May 17, 2019: Facebook registered a new company “Libra Networks” in Geneva.

May 24, 2019: There are reports that Facebook intends to launch stablecoins in multiple countries/regions in the first half of 2020; another report added that Facebook has been in contact with Coinbase and Gemini.

June 2019

June 3, 2019: According to reports, Facebook is negotiating with the US Commodity Futures Trading Commission (CFTC) for its stablecoin project.

June 6, 2019: There are reports that Facebook will announce Libra to the world in the coming weeks.

June 7, 2019: Laura McCracken, Facebook’s head of financial services in the Nordic region, confirmed that the company’s stablecoin will be linked to a basket of currencies, not just one currency.

June 13, 2019: According to reports, Uber, PayPal, Visa, Stripe, MercadoLibre, Bookings.com and MasterCard are all interested in supporting Facebook’s new cryptocurrency.

June 18, 2019: Facebook officially launched Libra and proposed a decentralized autonomous organization to supervise the project and a borderless, easy-to-transfer transaction method. Facebook stated that the company will participate in the Libra project through a new Calibra subsidiary. Calibra will develop a digital wallet for this project. The Libra project will be led by the Libra Association. The association currently has 28 member companies-which will grow to at least 100 member companies in the future. Its main responsibility is to supervise the development of Libra and obtain returns through “Libra investment tokens”.

June 18, 2019: US lawmakers called for an immediate suspension of Libra development until they have a deeper understanding of the project.

June 19, 2019: The US Senate Banking Committee announced that it will hold a hearing on Libra in July.

June 21, 2019: The Group of Seven (G7) announced that it will set up a working group to evaluate Libra.

June 24, 2019: Representative Maxine Waters, Chairman of the Financial Services Committee of the U.S. House of Representatives, announced that a hearing on Libra will be held in July.

June 27, 2019: The Monetary Authority of Singapore announced that it is looking for more information about Libra and is in contact with Facebook.

July 2019

July 2, 2019: Public Citizen, the North American privacy and consumer watchdog agency, called on lawmakers to suspend the development of Libra; more lawmakers called for the suspension of Libra development.

July 12, 2019: US President Donald Trump stated in a series of tweets attacking Bitcoin and Facebook that Libra was “untenable or unreliable”.

July 16, 2019: David Marcus attended the hearing of the US Senate Banking Committee; it is worth noting that Bitcoin was not mentioned during the hearing.

July 17, 2019: David Marcus attends the hearing of the US House of Representatives Financial Services Committee.

July 20, 2019: Morgan Beller, former partner of Anderson Horowitz, appeared in media reports; she was said to be the main driver behind Facebook’s Libra project and Calibra.

July 24, 2019: Visa CEO Alfred Kelly stated that although his company has signed a non-binding letter of intent, the company has not yet become a member of the Libra Association.

July 25, 2019: Facebook CEO Mark Zuckerberg (Mark Zuckerberg) stated that “no matter how long” his company will try to persuade lawmakers and launch Libra.

July 30, 2019: In the disclosure information submitted to the U.S. Securities and Exchange Commission, Facebook acknowledged that Libra may never be released.

August 2019

August 23, 2019: There are reports that strong regulatory opposition has caused uneasiness among three Libra protocol members, two of whom are considering exiting the project altogether.

August 27, 2019: The Libra Association announced a bug bounty program that rewards up to $10,000.

September 2019

September 10, 2019: Facebook announced the list of legal currencies that make up the Libra basket of currencies: U.S. dollar, euro, yen, pound, Singapore dollar.

September 11, 2019: The Swiss Financial Market Supervisory Authority confirmed that the Libra Association had contacted it and asked how the regulator would evaluate it.

September 16, 2019: David Marcus once again tried to refute the claim that Libra threatens monetary sovereignty or economic stability, in response to the criticism of French lawmakers such as Bruno Le Maire.

September 23, 2019: Facebook disclosed details of supporting Libra’s basket of currencies: 50% US dollar, 18% Euro, 14% Japanese yen, 11% British pound, 7% Singapore dollar.

October 2019

October 4, 2019: PayPal officially withdrew from the Libra Association.

October 11, 2019: Mastercard, Visa, Mercado Pago, Booking Holdings, eBay and Stripe withdrew from the Libra Association.

October 14, 2019: 21 companies signed the Libra Association Constitution, formally established a stablecoin initiative council, and elected an executive committee.

October 22, 2019: Mark Zuckerberg attends the hearing of the US House of Representatives Financial Services Committee.

January 2020

January 9, 2020: Facebook CEO Mark Zuckerberg stated that the company plans to decentralize finance and business by 2030.

January 17, 2020: The Libra Association announced the establishment of a technical steering committee, led by representatives of its five member entities, which will oversee the development of its technical roadmap and try to establish a developer community.

April 2020

April 16, 2020: The Libra Association revised the white paper, abandoned the original idea, and announced the issuance of a series of stablecoins backed by a single currency instead of a single stablecoin backed by a basket of currencies.

May 2020

May 6, 2020: The Libra Association appoints HSBC Chief Legal Officer and former US Treasury Secretary Stuart Levey as its new CEO.

May 19, 2020: The Libra Association appointed Robert Werner, a former official of the Financial Crime Enforcement Network and Office of Foreign Assets Control, as its general counsel.

May 26, 2020: Calibra was renamed to Novi; Facebook also detailed the interoperability of Novi with Messenger and WhatsApp platforms.

June 2020: Sterling Daines, Head of Financial Crime Compliance at Credit Suisse, was appointed as the Chief Compliance Officer of the Libra Association.

November 2021: Former US Department of Homeland Security official Stevan Bunnel (Stevan Bunnel) was appointed as the general counsel of the Libra Association, only three months after Warner was appointed.

September 2020

September 17, 2020: The Libra Association announced that former HSBC executive James Emmett will become the managing director of Libra Networks.

September 22, 2020: Libra co-founder Morgan Baylor leaves Facebook and Novi to enter the venture capital firm NFX.

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