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Tearsheet Weekly

By Tearsheet Editors -- June 30, 2019

This week really was all about Facebook's Libra project as industry insiders and outsiders grappled with understanding what it is and what it means across the economy.

What is it? Facebook formally announced its Libra project with the publishing of its white paper. It lets people buy things and send money to others with low fees over a blockchain.

Association and partnership structure: Facebook has created an association around Libra to help with governance (FB gets one vote like any other partner). The association counts firms like Mastercard, Stripe, Andreesen Horowitz, Uber and Spotify as partners.

 •   Facebook also created a subsidiary called Calibra that has already applied for money transfer licenses around the world. Calbra will provide financial services that will let people access and participate on the Libra network.

Read more:

•    An explanation of Libra for millennials
    Is Libra really a cryptocurrency? Does it matter?

Pushback: Libra will come under scrutiny as lawmakers and regulatory bodies reacted quickly to the announcement. Congressional hearings are already scheduled. Facebook recently hired a UK lobbyist to help with the Libra launch.

“They will not get a free pass anywhere,” Sean Park, Founder and Chief Investment Officer at Anthemis told Reuters. “And, given their intention to be global, they will ultimately need literally hundreds, perhaps thousands, of licenses from hundreds of different regulators across the globe.”

Facebook's entry into financial services: Libra and its financial services subsidiary Calibra provides a framework for the tech firm to enter more broadly into financial services. FB has subsequently said it's looking at lending.

•    the partnership structure give FB incentive to build its own products and collaborate with other providers
•    interestingly, there were no banks announced as Libra partners




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