According to foreign media sources, Meta's cryptocurrency project Diem (formerly known as Libra), launched in 2019, is considering packaging the sale of related assets to refund the investment of early investors. Meta owns about a third of Dim and is currently discussing with investment banks the best option for selling its intellectual property — to silvergate Capital Corp," people familiar with the matter said.
While the news has yet to be confirmed by Meta, given the difficult situation in which the project has suffered repeated setbacks since its inception, bankruptcy and dissolution may have long been its inevitable end.
1. A coin issue from entry to abandonment
In June 2019, Facebook, which had not yet changed its name to Meta, decided to venture into the cryptocurrency space and released a white paper on the project called Libra, which claimed to provide billions of users with a payment method as convenient as sending text messages.
Unlike bitcoin, Ethereum and other highly volatile cryptocurrencies, Libra's goal is to create a crypto stablecoin, which is characterized by the fact that the price will generally be based on a certain fiat currency and will not fluctuate significantly, such as Tether's stable coin Tether USD (REFERRed to as USDT), which is based on the value of the US dollar, that is, 1 USDT = 1 US dollar. Libra's target is a basket of low-volatility assets denominated in four fiat currencies: usd, £, eur and yen, as collateral.
At that time, the cryptocurrency market was surging with Bitcoin breaking through from around $3500 to another $10,000, and the entire crypto market was full of optimism. Zuckerberg, who plunged headlong into the cryptocurrency market, is similar to today's mentality of betting on the metacosm across the board, feeling anxious about the company's future and not wanting to miss out on the industry.
Only this time, Zuckerberg misjudged the situation, and because it involved the exchange between cryptocurrencies and fiat currencies, touching the roots of the financial system of sovereign countries, global regulators gave Libra a head start.
Just a month after the Release of the Libra Whitepaper, the U.S. House of Representatives Financial Services Committee held a hearing on the Libra cryptocurrency. In October of the same year, the five EU countries, led by France, were joining forces to boycott Libra's entry into the European market and were preparing to ask Facebook to abandon the project.
Under regulatory pressure, Libra's partners have also begun to leave it, and on October 5, 2019, PayPal announced that it would abandon its participation in the Libra project, just like every snowflake in an avalanche can not be left alone, Visa, Mastercard, Stripe, eBay, Mercado Pago and other partners have also announced that they have drawn a clear line with Libra, and the whole project has begun to become uncertain.
In April 2020, Libra was ready to regroup, hiring former U.S. Treasury official and chief counsel of HSBC Holdings Limited as CEO, and renaming Libra Toem, announcing that it would no longer seek to create a global cryptocurrency payment network, but instead become a compliant stablecoin.
But the overall decline of the project has been unstoppable, Libra project leader David Marcus left Meta at the end of last year, Zuckerberg also began to start a new stove, intending to play in the grand idea of the meta-universe, Libra finally inevitably went to the end of the sale of money.
2. Zuckerberg, who is in a hurry to go to the doctor
Why did Libra, which was once in the spotlight, end up with such a dismal ending? There are two main reasons for this:
One is that Meta touches the roots of a sovereign nation's financial system. For a country, the right to mint is a symbol of its national sovereignty and the embodiment of the highest public power, which is especially important for the dollar, which is in a hegemonic position in the global financial system. When Meta, which has a large global user base, issues cryptocurrencies, it already poses a challenge to the hegemony of the US dollar, and the existing financial system in the United States will inevitably be hit.
Second, from 2019 to now, the global anti-monopoly call has not stopped, Meta has been one of the focus of the US regulators, when such a giant in the social field has the right to mint, it will undoubtedly further strengthen its monopoly ability, and even have absolute "power" in its own ecosystem, which is intolerable to regulators. After all, this is a company that has banned the president of the United States.
In addition, another reason that cannot be ignored is that It is not too early for Meta to cut into the crypto market. Before the release of the Libra project, the mainstream stablecoins pegged to the US dollar already had THE USDT launched by Tether in 2015, the USDC launched by Circle in 2018, and the TUSD launched by the TrustToken platform, plus the digital mortgage type stablecoin DAI, the physically collateralized stablecoin DGX, etc., and the entire stablecoin market has been overcrowded.
More importantly, in the field of cryptocurrencies that adhere to the "decentralization" as the standard, Meta, a centralized technology giant that has called the wind and rain in the Web 2.0 era, is not necessarily welcomed by users.
Taking a step back, if Meta can issue stablecoins, then other tech giants such as Google and Microsoft can also issue cryptocurrencies, and the final outcome is likely to evolve into a farce of currency abuse by tech giants.
In hindsight, Libra was clearly a doomed project. But for Zuckerberg in 2019, the quest for innovation is imminent, even if it is a driftwood, as long as it can save his life, he will not hesitate to grasp it.
Meta's 2019 financial report shows that its revenue growth was 26.61%, and the growth rate slowed down significantly, with a net profit of $18.485 billion, a sharp decrease of 16.4% from 2018. At the same time, FB's business is also very single, 98.5% of the revenue comes from advertising revenue, when his own GOOD VR/AR field is still experiencing a long winter, Zuckerberg urgently needs to find a new story for Meta, to alleviate the anxiety caused by the mobile Internet era, which may be the main reason why he misjudged the situation and rushed to the doctor.
Zuckerberg used actions to perform a "cryptocurrency from entry to abandonment" for everyone, the ending is a little bleak, but fortunately, he now has a new "meta-universe", this new story is the future trend or capital speculation, at least lively enough, not to be abandoned before it starts.