Mark Zuckerberg's first crack at a cryptocurrency was an embarrassing flop. Don't bet on him giving up so easily.

  • It’s been nearly two years since Facebook launched its ill-fated ‘Libra’ cryptocurrency effort.
  • Since then, the popularity and acceptance of cryptocurrencies has soared.
  • But while the world has left Libra for dead, Facebook has not given up on its crypto dreams.
  • See more stories on Insider’s business page.

In June, 2019, Facebook unveiled plans to create a digital currency called Libra that, once released the next year, would be pegged to hard currencies including the US dollar. As Facebook spun things, Libra would be a democratizing force, a salve for the unbanked, the tech giant’s benevolent gift to the world. 

It was a sound-and-fury announcement greeted with attendant shock and awe: by cryptocurrency advocates who had dreamt of such a powerhouse getting behind their cause; by established payments players and their merchant customers excited by the convenience of non-government-controlled money transfers; and, less enthusiastically, by governments themselves, chagrined by the notion that Facebook might usurp their authority.

Oh, and Libra promised to be pretty good for Facebook too. “It was freaking brilliant because it could plug into its 2.2 billion-user base,” says Shawn Douglass, CEO of Amberdata, a startup that sells investing information to cryptocurrency traders. “Had they succeeded, all Facebook users would have been able to use Libra immediately.”

But Facebook didn’t succeed. Nearly two years on the company has nearly nothing to show for its efforts. Regulators in the US and Europe quickly put the kibosh on Libra’s aspirations, what with Facebook’s string of privacy screwups, the Cambridge Analytical scandal and general mistrust. Some companies that had joined an association Facebook formed to administer Libra bailed out, leaving the group far short of its goal of 100 members. Late last year Libra changed its name to Diem, a distraction without substance given that it still doesn’t exist. And key Facebook executives who helmed the internal project that created it fled for new jobs.

In all, the saga of Libra/Diem has become a cautionary tale, the worst combination of an impressive idea, terrible timing, and institutional arrogance that ought to be an example for Facebook’s Big Tech peers in the era of maximum concerns about their concentration of power. One cryptocurrency executive likens Facebook’s hubris in pushing Libra when it did to how Boeing would have been received had it tried launching a new aircraft in the middle of the investigation of its crash-prone 737 Max plane. “Facebook launched a new plane right in the teeth of incredible scrutiny,” the executive says. 

Numerous influential crypto-world people I spoke to recently say they never hear a peep anymore about the Facebook effort. Facebook—which likes to point out it is merely a member of the Geneva-based Diem Association, a protestation no one much accepts—says only that work continues on its “digital wallet” for trading Diem called Novi (also a new name; it formerly was Calibra), with no date to discuss for the launch of either. (A digital wallet is an app for using a digital currency. Like so much about the newfangled world some refer to as “de-fi,” for decentralized finance, it is an abstraction riddled with jargon that can intimidate newcomers.)

For its apparent failure, however, the Facebook/Libra/Diem/Novi phenomenon coincides with a consequential moment in the world it tried to affect. By all accounts the Facebook move spooked the Chinese government, which accelerated its own nascent plans to issue a digital currency pegged to its national currency, the yuan. This is important because government-controlled digital currencies can be traced, giving its issuer vast power, in China’s case another tool for its already fearsome surveillance capabilities.

Facebook also contributed to the US and other governments taking digital currencies more seriously. Even the US Federal Reserve Bank, long thought to be a crypto-Luddite, says it is studying the matter, which is no trivial statement. Were the Chinese and US government to have digital money, the need for a Facebook-organized currency would diminish.

Cesc Maymo/Getty Images

And perhaps most importantly, the digital currency world simply has moved on since the summer before last. The value of bitcoin has leapt more than tenfold, and stodgy institutions from Goldman Sachs to Visa have sprung into action to facilitate its use. The coming listing of cryptocurrency exchange Coinbase is a kind of Netscape moment for the previously doubted field, a watershed event that announces something like: ‘Stop laughing at this industry. We are for real.’ And other consortiums are popping up where Facebook’s framework once looked to hold sway. Coinbase, Fidelity, Square, and others this week formed the Crypto Council for Innovation to lobby on the field’s behalf.

Facebook obviously has plenty on its plate, from data leaks to antitrust cases to regulatory changes that could upend its entire business model. Two top members of is cryptocurrency project have left. Libra co-founder Morgan Beller departed late last year to join a venture capital firm, telling CNBC she remains a “fan girl” of the effort. Kevin Weil, Novi’s top product executive, left recently to become a top executive of satellite imaging startup Planet. He told me by text he’s a believer in the mission Facebook, Diem, and Novi are pursuing.

As for that mission, it very likely is dormant rather than dead. One executive at a key payments concern believes Diem and Novi will in fact debut as soon as this summer. Meanwhile, David Marcus, the top Facebook executive on all the digital currency products, last year took on the added responsibility of overseeing payments across Facebook’s products, including Instagram and WhatsApp. This had been an overlooked opportunity at Facebook, and the word is that Marcus has slowly been exerting his influence to tie together the payments portfolio.

So while Facebook may well have missed its moment to create the leading non-governmental digital currency, it still has plenty of options in what is still a young field. Moreover, that other entities have grown in important since Facebook’s opening gambit may give it some political cover to join the fray.

If one day Facebook succeeded in facilitating payments for its now 2.8 billion users and then gave them a new way to transfer money around the world, the ramifications would be enormous, notably for vulnerable banks and credit card issuers, if less so for wary and powerful governments. “Zuck doesn’t ever give up on something he fundamentally believes in,” says a keen observer of Facebook CEO Mark Zuckerberg. 

After all, when you’re worth $100 billion and just shy of 37 years old, the near-term demise of a scheme to create a global currency from scratch is a mere setback.

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An update:

In early December I wrote about the imminent IPO of the trend-surfing software company C3.ai, headed by Silicon Valley stalwart Tom Siebel. I cast doubt on C3’s ability to realize its stated ambition of achieving a $3 billion valuation in its initial offering. C3 proved me short-term wrong: It raced past that target, trading so frothily it nearly touched $18 billion before peaking in early February.

The story doesn’t end there, though. C3’s stock promptly started falling and is since down 65% from its peak. Investors judged the company’s guidance on March 1st to be weak, accelerating the drop. Now the company’s value is $6.5 billion, still an astounding level considering its losses are widening and its annualized revenues are about $200 million. (C3’s price-to-sales multiple is bigger than Salesforce.com by a factor of three.)

Something still doesn’t add up.

Adam Lashinsky is a Business Insider contributor and former executive editor at Fortune magazine, where he spent 19 years. He is the author of two books: “Inside Apple” (about Apple) and “Wild Ride” (about Uber).

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