Visa, Mastercard, Stripe, and eBay exit Facebook’s Libra project

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"

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.

I spent a couple years in the DC blockchain scene. If my experience is anything to go by, the answer has a lot to do with how much of the technical expertise in this space is concentrated behind a screen consisting of a relative handful of self-declared consultants. These characters (many with Deloitte on their biz cards) prowl the power hangouts of DC to talk up how great crypto is, while handing out free samples to every midlevel policy wonk they can get beer time with. This has been going on for years and I see Libra as the first major attempt to capitalize on this ground game.

These wonks then make all the right favorable noises when queried by the FBs and VISAs of the world about the posture of the agencies, organizations, departments and NGOs they work for regarding crypto. As there's little to no in-group tolerance for critical introspection, there's correspondingly little to no collective power of seeing how this all looks from the outside.

It's a tight mutual feedback loop, twisted into hysteresis because everyone except the general public stands to gain from telling each other that the regulatory coast is clear.

It wasn’t implemented as a proof of work currency, but as a small distributed database. At its core it’s a multicurrency fiat currency fund that you can trade ownership units of, like an ETF. But internationally on no specific stock exchange. And when you buy units of it, the currency you put into it gets added to the fund, so it isnt dilutive.

It’s basically creating a global currency out of the worlds fiat currencies, like banks did with gold long time ago. It’s quite clever and I could see the economic value and issues of something like market created globobucks.

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