Meta's Crypto Journey
Meta is shutting down its crypto wallet Novi on Sep. 1st.
This shouldn’t be surprising after its crypto ambition evaporated.
Here is a recap of Meta(Facebook)’s 3-year journey in crypto payment.
👉 𝐀𝐧 𝐚𝐦𝐛𝐢𝐭𝐢𝐨𝐮𝐬 𝐠𝐥𝐨𝐛𝐚𝐥𝐜𝐨𝐢𝐧
Jun ‘19: Facebook announced the details of the planned global coin Libra.
This supposedly mission-driven project immediately generated huge fanfare globally. However, it was ill-advised and doomed from the very beginning.
With the global reach and a multi-currency reserve, Libra could impact a country’s money supply. No central bank would give up control of legal tender to a private company.
Even without the outright ban, regulators sent clear messages. Large payment companies such as VISA/MasterCard/PayPal quickly backed out of the Libra project - Facebook needed these so-called founding partners to recognize its new digital currency.
Oct ‘19: Libra Association was inaugurated anyway in Switzerland, under a huge cloud of doubt.
👉 𝐀 𝐰𝐚𝐭𝐞𝐫𝐞𝐝-𝐝𝐨𝐰𝐧 𝐬𝐭𝐚𝐛𝐥𝐞𝐜𝐨𝐢𝐧
Libra’s application for a paid license from the Swiss authority met with intensive and lengthy scrutiny, including feedback from more than two dozen regulatory authorities around the world.
Dec ‘20: Libra was rebranded to Diem in order to show “organizational independence”.
May ‘21: Diem was downgraded from a global coin to a USD stablecoin.
Diem gave up the pending payment license application in Switzerland and moved its operational headquarter from Geneva to Washington, D.C.
👉 𝐆𝐚𝐯𝐞 𝐢𝐭 𝐚𝐥𝐥 𝐮𝐩
Even with the scaled-down stablecoin, Facebook could not shake off its bad image.
Given its infamous history, both regulators and consumers are rightfully wary about the big tech’s entry into people’s daily financial lives.
Oct ‘21: recognizing the image problem from the past, Facebook rebranded itself as Meta.
Despite the scope scaleback and rebranding, it became clear over time the US regulators would not give the green light to Diem.
Jan ‘22: Meta abanded the Diem initiative. Diem was sold to its partner bank in California, Silvergate.
Jul ‘22: Meta announced the demise of the crypto wallet Novi. It has been 3 years since the initial Libra announcement.
👉 𝐋𝐞𝐬𝐬𝐨𝐧 𝐋𝐞𝐚𝐫𝐧𝐞𝐝
What can be learned from Meta/Facebook’s experience? Probably quite a few.
One particular came to mind:
🚩 𝘛𝘦𝘤𝘩𝘯𝘪𝘤𝘢𝘭𝘭𝘺, 𝘦𝘷𝘦𝘳𝘺𝘵𝘩𝘪𝘯𝘨 𝘪𝘴 𝘥𝘰𝘢𝘣𝘭𝘦. 𝘉𝘶𝘵, 𝘵𝘩𝘢𝘵 𝘥𝘰𝘦𝘴𝘯’𝘵 𝘮𝘦𝘢𝘯 𝘺𝘰𝘶 𝘴𝘩𝘰𝘶𝘭𝘥 𝘥𝘰 𝘪𝘵.
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