Facebook is backpedaling from its ambitious vision for Libra

Enlarge / David Marcus, head of blockchain at Facebook, speaks at a House Financial Services Committee hearing on Wednesday, July 17, 2019. (credit: Andrew Harrer/Bloomberg via Getty Images)

David Marcus, the head of Facebook’s new Calibra payments division, appeared before two hostile congressional committees this week with a simple message: Facebook knows policymakers are concerned about Libra, and Facebook won’t move forward with the project until their concerns are addressed.

While he didn’t say so explicitly, Marcus’ comments at hearings on Tuesday and Wednesday represented a dramatic shift in Facebook’s conception of Libra. In Facebook’s original vision, Libra would be an open and largely decentralized network, akin to Bitcoin. The core network would be beyond the reach of regulators. Regulatory compliance would be the responsibility of exchanges, wallets, and other services that are the “on ramps and off ramps” to the Libra ecosystem.

Facebook now seems to recognize its original vision was a non-starter with regulators. So this week Marcus sketched out a new vision for Libra—one in which the Libra Association will shoulder significant responsibility for ensuring compliance with laws relating to money laundering, terrorist financing, and other financial crimes.