Written by Zach Le

Founding Partner, Sutler Ventures
June 20 2019

Is Facebook's Libra a Matter of East vs. West?

How an American company is taking cues from a primarily Asian movement

Facebook and ICO Alert logos

 

On June 18, 2019, Facebook released the details and whitepaper to it’s highly anticipated blockchain project: Libra. The project was met with both criticism and praise from both sides of the fence.

 

calibraapp_earlylookSneak peak of Calibra, Facebook's digital wallet that allows users to participate in Libra.
(Source: https://newsroom.fb.com/news/2019/06/coming-in-2020-calibra/)

 

We won't go into details about these topics as there are plenty of great articles out there on the topic – DYOR. What many people are not discussing is the deep separation within the community that Libra brings to the surface: the opposing development direction between the East and the West.

 

via GIPHY


Crypto has traditionally been a retail movement driven by the East. Most projects, communities, and exchanges have come from Asia. This is attributed to both economic and social factors. There is generally a lack of trust among most Asians of their government. Take, for example, the ongoing social unrest in Hong Kong right now. In addition, the means to which one can generate wealth has tightened over the last decade. The high growth rate of property value and modernization has led to a saturation of skilled laborers. This natural growth was unsustainable. However, reduction of growth rate has lead to a highly competitive environment that makes it hard for entrepreneurs in traditional sectors. As a result, they turn to blockchain. In these conditions, the ideas of decentralization and disruption are very potent. Developers and investors are driven to a project under the hope that it can generate 10x-100x returns. To them, the risk is acceptable because of the impact that success brings is potentially life changing.

 


The West sees things differently. The U.S., U.K., and Europe, for example, have strong regulatory frameworks that are there to protect investors. For the most part, people have a moderate to low level of distrust of their government, and the sense of nationalism is strong. As a result, development and investments are geared more towards riskier initiatives that focus more on upgrading the system. Stablecoins, custody, and ETFs are the headlines. Libra is another arsenal of the West in its battle against disruption. Libra puts pressure on existing payment processors, messengers, and social media crypto projects. Many of these projects positioned themselves as direct disruptors to Facebook’s social media empire. The fight for market share has become significantly harder now. As always, take your time to do your research.