Libra Shrugged: How Facebook Tried to Take Over the Money

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Silicon Valley tries to disrupt the world — and the world says “no.”

Facebook: the biggest social network in history. A stupendous, world-shaping success. But governments were giving Facebook trouble over personal data abuses, election rigging and fake news.

Mark Zuckerberg wondered: what if Facebook could pivot to finance? Or, better: what if Facebook started its own private world currency?

Facebook could have so much power that governments couldn’t stop them. It would be the Silicon Valley dream.

 

Facebook launched Libra in June 2019. Libra would be an international currency and payment system. It would flow instantly around the world by phone. It could even “bank the unbanked.” Libra could apparently do all this just by using a “blockchain.”

But Libra would also make Facebook too big to control— and to lead the way for Facebook’s Silicon Valley fellows to swing the power of their money as they pleased. Facebook and their friends could work around any single country’s rules. Libra could shake whole economies.

And Facebook would become the “digital identity” provider to the world. If you wanted to use money at all, you’d have to go through Facebook.

Governments looked at Libra — and they saw another 2008 financial crisis in the making. Facebook’s plan would have made the company even more entrenched — at the cost of broken economies worldwide. Starting with toppling the US dollar.

Libra was as incompetent as it was arrogant — and the world stopped it in its tracks. But how did Facebook put forward such a bizarre and ill-considered plan, that left every regulator who saw it reeling in horror?

And what happens when another company tries the same trick? Or when Facebook won’t take “no” for an answer, and releases the cut-down version that they’re already calling “Libra 2.0”?

“Libra Shrugged” is the story of a bad idea.

 

Also covered:

  • Bitcoin and cryptocurrency: the source of all the bad ideas in Libra.
  • Central Bank Digital Currencies: digital versions of official legal tender, suddenly fashionable again because of Libra.
  • Facebook’s early forays into payments, with Facebook Credits and Messenger Payments.


Table of Contents

Introduction: Taking over the money 7
Chapter 1: A user’s guide to Libra 9
Chapter 2: The genesis of Libra: Beller’s blockchain 15
Chapter 3: To launch a Libra: Let’s start a crypto 19
Chapter 4: Bitcoin: why Libra is like this 25
Chapter 5: The Libra White Papers 33
Chapter 6: Banking the unbanked 43
Chapter 7: The Libra Reserve plan and economic stability 49
Chapter 8: Libra, privacy and your digital identity 61
Chapter 9: The regulators recoil in horror 67
Chapter 10: David Marcus before the US House and Senate 77
Chapter 11: July to September 2019: Libra runs the gauntlet 95
Chapter 12: October 2019: Libra’s bad month 101
Chapter 13: Mark Zuckerberg before the US House 111
Chapter 14: November 2019: The comedown 123
Chapter 15: Central bank digital currencies 129
Epilogue: Libra 2.0: not dead yet 141
Appendix: 2010–2013: The rise and fall of Facebook Credits 149
Acknowledgements 155
About the author 157
Index 161
Notes 167



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