Third Issue - July 14, 2019
Welcome to the third issue of The Libra Informer.
Right now, we’re in the calm before the storm. On the regulatory front, next week will be when the show starts, as Facebook executives head on over to Capitol Hill to answer questions from U.S. lawmakers. The Block has obtained a memo detailing the exact questions that Congress wants answered. I highly suggest that readers take a look at this article they wrote to better understand the kind of storm that is about to hit.
On a more positive note, members of the Libra community are planning a hackathon.
hacklibra, as its called, is intended to be a four-week online hackathon with the aim of creating “tools and other helpful material to simplify and quicken future Libra development.” The effort is still being organized, so you’re interested in sponsoring the hackathon or lending aid to the team, now is a good time to reach out.
We’ll keep you informed about hacklibra’s progress as it nears launch.
And now, here is this week’s news.
Top News
The Week’s most important news announcements.
As we’re nearing the Libra’s team little reckoning with the U.S. Congress, David Marcus, the currency’s co-founder and the head of Calibra, responded to questions a length from the Senate Banking Committee in a 6-page letter, readable here.
Editor’s note: there is a very important line in the letter. It reads: “We expect the [Libra] Association to hold a governmental license or similar authorization appropriate for an issuer of a digital currency that is 100% backed by a reserve, to be subject to appropriate anti-money laundering oversight and inspection, and otherwise be subject to appropriate government regulation.” That last bit is a door for a great many things to enter through.
U.S. Federal Chairmen are usually a bit careful about what they say. If they say it’s going to drizzle, it’s going to be a hurricane. If they say it’s going to be a hurricane, it’s going to be 2008. So when Fed chairman Jerome Powell said this week that the Libra “cannot go forward” until serious concerns are addressed, that is probably a signal to stand straight and pay attention. More to point, he said that if cryptocurrencies became widely adopted, then we could see “a return to an era in the United States where we had many different currencies in the so-called national banking era.” He added that the Fed has established a working group to follow the project and is coordinating with other central banks around the world.
U.S. President Donald Trump tweeted about Bitcoin and the Libra. That pretty much dominated the news for an entire day, and it went about as one would expect. Trump accused Facebook of wanting to become a bank without being subject to banking regulations.
Editor’s note: not an entirely unfair view, since if Calibra gets into the lending business down the line, as its been hinted, then technically does fall under the category of banking services. However, here is an alternative take: Trump tweeted this out as a political message for Mark Zuckerberg, essentially saying that if Mark ensures Facebook stays neutral or even leans towards Trump in the coming years (2020 election), and he can have the Libra.
News and Analysis
General Libra-related news, along with more in-depth analyses from a variety of sources.
Wired has a pretty interesting piece on how decision to create the Libra came about, Facebook’s motivation for open-sourcing the platform, and the rational behind the Libra Association.
Techcrunch managed to score an interview with Dante Disparte (the Libra Association’s head of policy and communications), Christian Catalini (Calibra’s head economist), and Kevin Weil (Calibra’s VP of product). They answered question relating to the Libra’s regulation, taxation, and more, with some very interesting answers.
Peter van Valkenburgh at Coin Center put out a piece explaining how Bitcoin and the Libra differ.
A recent article in the Financial Times elaborates on how banks view the proposal for the Libra, what their own blockchain plans are, how they think regulators will respond, and new details on how some of them were actually approached by the Libra team.
Editor’s note: One quote from a bank executive stood out from the rest in the article. It reads: “If this thing has the scale of 2bn people who can move money around outside of the financial system (without AML/KYC), it makes a mockery of the system. We won’t have to persuade them in Washington . . . regulators are at it, they’ll make them lift to the same standards as everyone else.”
Diego Zuluga, a policy analyst at the Cato Institute’s Center for Monetary and Financial Alternatives, conducts a deep dive into the Libra’s potential to present a systemic risk to the current banking system.
Business
Announcements and news about businesses that are integrating the Libra and the Libra blockchain, or are otherwise making use of it.
eToro seems really gungho about the Libra. They have launched launched their latest portfolio, which offers investors the opportunity to take a stake ($2,000 minimum) in the companies involved in the Libra.
The band is getting back together! Maybe. The Winklevoss Twins, co-founders of fiat on-ramp and crypto exchange Gemini, and famous for their fight with Mark Zuckerberg over Facebook, are considering joining the Libra Association.
Association
News about the Libra Association’s members. This includes new members, members’ work on the Libra, and notable organizations that have expressed interest in joining the Association.
Facebook isn’t the only Association member intent on shaking things up. Stripe, a payments company, introduced an API for creating physical and virtual cards in the United States. Will this sort of thing lead to Libra cards at some point in the future?
Anchorage, cryptocurrency custodian for institutional investors and a member of the Libra Association, recently raised $40 million in a Series B venture round. Fellow Association members Visa and Andreessen Horowitz partook in the round.
Regulatory
The latest regulatory pronouncements and events that affect the Libra.
A draft discussion bill entitled the “Keep Big Tech Out of Finance Act” is making rounds in the U.S. House Financial Services Committee just days before the Libra hearings. We can guess who it is aimed towards. At the moment though, it has almost no chance of passing, and more likely just reflects a knee-jerk reaction to the initial Libra proposal.
Mark Carney, governor of the Bank of England, is a bit more open-minded about the Libra compared to his peers. In remarks made at the Financial Stability Report press conference, he notes that, despite the skepticism surrounding the Libra, the currency is attempting to solve real problems. He stressed though that the Libra needs to be as perfect as can be if it even wants to see the light of day.
Though the Libra probably won’t be available in mainland China (Facebook is banned there), what goes on in the country is still of interest. On that note, Wang Xin, director of the research bureau at the People’s Bank of China (or PBOC) is concerned that the Libra could impact monetary stability, and is forcing the bank to ramp up its efforts at issuing its own central bank digital currency. Similarly, Mu Changchun, the deputy director of the PBOC’s payments department, believes that the Libra cannot sustain itself without supervision by central banks. Finally, the former head of the PBOC, Zhou Xiaochuan, said that the Libra heralds the rise of global digital currencies.
Editor’s note: “could ramp up” its efforts is a bit disingenuous. As of Tuesday, July 9th, it is official: the country will create is own central bank digital currency. The announcement of the Libra was the “alarm” that set Beijing off.
Confirming suspicions that India country wouldn’t allow the Libra, a spokesperson for Facebook told The Economic Times that “There are no plans to offer Calibra in India.” This follows comments by Economic Affairs Secretary Subhash Garge, who told Bloomberg that the “design of the Facebook currency has not been fully explained. But whatever it is, it would be a private cryptocurrency and that’s not something we have been comfortable with.”
Ahead of the G7, Japanese authorities have set up a working group on the Libra, according to Reuters.
The Libra’s presence in Thailand is also looking iffy, which is problematic since Thais are among the biggest Facebook users in the region (around 50 million). The Bangkok Post reported that the Bank of Thailand is planning to meet with Facebook executives to discuss the currency, while a separate article quoted Sumaporn Manason, a legal office with the Fiscal Policy Office, who said the Libra’s entry into Thailand is iffy, since it does not fall under any type of existing local financial regulation. Finally, the Stock Exchange of Thailand floated the idea of launching its own domestic stablecoin, possibly later expanding it to Cambodia, Laos, Myanmar and Vietnam.
Developers
Where can you find some useful resources? What has the community has been working on? You can find all that and more here.
As mentioned in the introduction, hacklibra is being organized. Check it out when you have the chance.
Stronghold, the fiat on-ramp and off-ramp for the Stellar Network, has announced that customers who use its platform and want to explore the Libra protocol may do so through Stronghold’s platform API. This includes “develop[ing] made-to-order assets, including stablecoins and loyalty tokens.”
The team behind LiraVista, a Libra block explorer, has created a wallet for the testnet.
Remember, if you’re looking for resources or tools to build on the Libra blockchain, be sure to check out the Libra Resource Hub, created by The Libra Informer.
For your Career
Looking for a job in the Libra ecosystem? We’ll list opportunities as they become available.
Facebook’s Libra-focused subsidiary, Calibra, is looking for professionals to ramp up its efforts at developing the currency. There are currently 13 listings for data engineers, data scientists, economists, and more.
Facebook is also looking to fill numerous other positions as it seeks to ramp up its blockchain efforts, ranging from legal counsel to program managers.
Upcoming Events
Anything coming up related to the Libra that is happening near you? Check here to find out.
July 16, 10am: U.S. Senate Committee on Banking, Housing, and Urban Affairs Hearing. See their page for more information.
July 16, 6pm: CoinDesk will have a panel of experts weigh in on the Libra following the Senate committee hearing in New York City. There will be pizza and drinks! See here for more information.
July 17, 10am: U.S. House Committee on Financial Services Hearing. See their page for more information.
July 17, 2pm: Consensys will do a webinar on the Libra following the House committee hearing. See this page for more information.
July 24, 6:30pm: Thailand Libra Developer’s meeting. See their Facebook group for more information.
Community
Looking to join the Libra community? Are you a developer looking for guidance and collaborators to help build on the Libra ecosystem? Just want to talk about all things Libra? Search no more.
The Libra’s official forum. This the best place to ask questions, particularly since Calibra’s engineers check the more technical-oriented subforums every so often.
Can you speak Korean? 한국어 말 할수있어요? Check out the Korean Libra Association.
Thoughts on this newsletter and its content are welcome.
Suggestions for the newsletter, both in terms of content and structure, can be submitted to geheimnis086@gmail.com. Or you can find “Dunny” on the Libra developers’ Discord group.
A special thanks to Libra community member CasalettoJ/CircuitDev for his technical advice in composing this newsletter. He is working on a wallet for the Libra testnet.