Actually, all of those are provisional partners. At this point, their participation in the association doesn’t mean they’ve committed to paying $10 million to become a Libra node. The partners seem motivated by curiosity, FOMO, and a shared dream with Facebook that the effort could be both a boon to their ambitions in underserved economies and a milestone in the evolution of digital currency. But they have varying degrees of enthusiasm.
As Joshua Gans of the University of Toronto’s Creative Destruction Lab, one of the launch partners, puts it, the members have thus far been invited to a kind of constitutional convention. “It’s entirely possible not everyone stays part of the union after that,” he says.
Not surprising is the absence of any of Facebook’s giant tech peers, all of which are making their own, competing forays into digital payments. Google, Apple, and Amazon aren’t in line to be Libra partners, though Facebook says that they would be welcome, in what seems like the unlikely event they join. (None of those companies cared to comment, but Google released a blog post last week saying better relationships with banks are key to extending digital payments to the underserved billions.) Twitter and Square CEO Jack Dorsey, whose payment system would seem a natural partner, has recently gone all-in on Bitcoin, devoting talent and resources at Square to make it a more usable platform for payments. Last week, Dorsey praised the virtues of Bitcoin to Quartz, noting that, although he doesn’t know the details of Facebook’s effort, “I would hope that all private companies can see the value of having a stateless currency that all people can access, and is not bounded or constrained by any one corporate entity.”
Facebook would say, That’s Libra, Jack! We’re just one node! “I don’t think we or others would tolerate Facebook having undue influence,” says Katie Haun, a general partner at Andreessen Horowitz.
Still, the association was Facebook’s vision. Facebook engineers are doing the technical development, and will continue to do so. Facebook has created a dedicated programming language, called MOVE, for developers to write Libra applications. And even though the Libra Association has yet to choose a board, hire a managing director, fill almost three-fourths of its partnerships, or even meet for the first time, it has already released a White Paper and a stack of supporting documents. Who wrote all that stuff? Facebook, with the consultation of the current partners who reviewed, edited, and signed off on the materials. In theory, all of that could be tossed out the window once the full association---where nominally Facebook has just one vote---meets. In practice, though, Facebook has chosen partners who are inclined to share the values and ambitions that helped shape Libra thus far. So while the charter is yet to be finalized, it seems inevitable it will not vary drastically from the current draft.
More Venmo Than Bitcoin
Meanwhile, Facebook has already developed its own product, a wallet application called Calibra. Obviously, since the company developed the Libra technology, it had a head start on its partners. (Other companies are speculating about potential products, and fintech firms like Coinbase and PayPal could potentially include Libra in their wallets, but no other company has announced a product so far.) Calibra will run inside WhatsApp and Messenger, allowing seamless access to more than a billion people, and will be available as a separate app as well. It will launch once the Libra protocols are finalized sometime in 2020.
Despite Facebook’s emphasis on the “decentralized” aspects of Libra blockchain, the Calibra experience will be more Venmo than Bitcoin. Calibra will store your Libra coins and hold the cryptographic keys required to access them---a user-friendly move, in the sense that you can lose your password or phone and know your money will remain accessible. That also allows Calibra to easily intervene in cases of fraud or other disputes. But Calibra’s custody of the keys and coins means the company can move money between its wallet’s users without relying on the blockchain itself; the only time the blockchain gets involved is when a customer wants to send money outside of Facebook to a wallet or service developed by another company.
Ceding control of the Libra Association thus sets up a potential win-win for Facebook. With Calibra, the company gets its mostly walled garden: a way to internally handle things like cross-border payments between friends and family, micropayments within Facebook applications, and transactions on Facebook’s marketplace and with small-businesses---and potentially other financial services as Libra’s technology matures. With the Libra Association, it gets the benefits of an open-source ecosystem, along with an external group to manage the complex financial aspects of the coin and messy global regulations. Subsequent non-Facebook tools and applications built for the Libra blockchain, as well as the wide network of customers and merchants brought in by partners, stand to increase the utility of Libra for Facebook’s users.
