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stopping those processors,
or other dropouts like
eBay, travel-site owner
Booking Holdings, and
Argentine fintech Mercado
Libre, from adding the
payment option across
their networks or from
rejoining the association.
The quitters have “all the
option value, none of the
heat,” Marcus says. As
PayPal CEO Dan Schul-
man recently told Fortune,
“Maybe later, there are
ways we can work together.”
Visa, or Stripe, enabling the
company to fly a “mission
accomplished” flag. And the
majority of cryptocurrency
experts and entrepreneurs
Fortune interviewed said
they expect Calibra to add
integrations with existing
digital stablecoins.
One partnership may
be close to launching: Face-
book has had quiet talks
with Coinbase and Circle
about joining Centre, an
industry consortium that
mints USD Coin, a U.S.4.
BEFORE LIBRA,
CAL I BRA
W
HILE FACEBOOK and
its partners work
out the kinks in
the Libra currency, Face-
book can still build digital-
payment businesses around
its Calibra unit. “It’s foolish
to think Facebook will not
proceed with this,” says
Meltem Demirors, chief
investment officer for
CoinShares, a digital asset
management firm. “The
opportunity is too big for
them not to do anything.”
Bitwise’s Horsley thinks
Calibra could start by inte-
grating with traditional pay-
ment providers like PayPal,dollar-pegged digital cur-
rency, Fortune has learned.
Calibra could also work
with stablecoins issued by
startups such as Gemini,
Paxos, and TrustToken.
Right now, stablecoins
are used almost exclu-
sively in cryptocurrency
trading, where investors
deploy them as a cash
equivalent. But blockchain
advocates say their stability
makes them promising
candidates for future use
in digital payments. And
because they’re pegged to
just one currency, says Bill
Barhydt, CEO of crypto-
currency wallet startup
Abra, they offer “a very
clear path from a compli-
ance perspective.” He addsUnless you elect Jesus to
run [the Libra Association],
you’re putting a lot of faith
in mankind.”China on a BlockchainW
HEN MARK ZUCKERBERG appeared in October to
defend Libra before a House committee, he warned,
“The rest of the world isn’t waiting.” Indeed, at press
time, the U.S.’s leading economic rival was poised to become the
first major country to implement a national electronic currency.
The People’s Bank of China (PBOC), China’s central bank,
plans to put a digitized version of the renminbi—dubbed the
Digital Currency Electronic Payment (DCEP)—into people’s
hands before the end of 2019, according to Caijing, a Chinese
financial magazine. The central bank is reportedly working
with state-owned banks and telecom companies on a small-
scale pilot that will start in the cities of Shenzhen and Suzhou.
(The PBOC did not reply to Fortune’s request for comment.)
The digital yuan will be partly based on blockchain technology,
which underpins cryptocurrencies. The virtual banknotes are ex-
pected to be compatible with China’s wildly popular WeChat Pay
and Alipay payment apps. People will be able to use the DCEP to
pay for goods and services related to transportation, education,
medical treatment, and retail, allowing the government to see
which scenarios gain the most traction, according to Caijing.
The PBOC has been actively investigating the digital currency
idea since 2014, but it kicked the effort into high gear after the
Libra project was announced in June. Why the enthusiasm?
Digital currency could help China keep closer tabs on its money
supply, clamp down on capital outflows, and expand its influ-
ence in emerging markets where demand for digital payments is
high. Ultimately, it’s about supervision and control.
In his House testimony, Zuckerberg intimated that Libra
could be the democratic counterbalance to China’s authori-
tarian aims. But skeptics have pushed back against that as
a rationale for rallying behind Libra. “Private power can be
just as scary as excessive government power,” says Saule
Omarova, a Cornell Law School professor who specializes in
financial regulation.