This is the web version of The Ledger, Fortune’s weekly newsletter covering financial technology and cryptocurrency. Sign up here to receive future editions.
Tomorrow we’re publishing a feature about Libra, the audacious digital currency plan spearheaded by Facebook. Due to the grandiosity of its vision, the severity of critics’ objections, and the uncertainty about its future, Libra could be considered the defining fintech story of the year. We’ve included it as part of a package of 25 “big ideas” that are poised to shape the next decade in our January issue of the magazine.
Over the past couple months, I collected more material than could ever possibly fit into the story. Today, in a Ledger newsletter exclusive, I’m pulling back the curtain on my reporting and sharing some highlights that are not in the feature.
This is our last edition of The Ledger newsletter before we break for the holidays. You can count this special offering as a thank you for reading us this year.
Here are the takeaways.
- The Libra Association is still apparently being bankrolled by Facebook. Founding members of the Swiss nonprofit—which is comprised of 21 companies, including Uber, Spotify, and Coinbase, and is now tasked with caretaking Libra—have yet to wire their $10 million minimum membership fee-cum-initial investment to the organization, though they have “committed” to doing so, a person familiar with such transactions at one of the member companies tells me. Presumably, members are first waiting to see whether there’s any real hope of the project getting off the ground, given all the regulatory blowback. (Facebook referred my query about this to the Libra Association, which declined to comment.)
- Facebook employees are already using Libra. If someone on the Calibra team—Facebook’s digital wallet subsidiary—shows up late for a meeting, that person is expected to forfeit virtual coins as a penalty. These Libra tokens exist on a “testnet” and have no reserve backing, so they’re pretty much Monopoly money. “I’m kind of chronically late so I pay up all the time,” Kevin Weil, Calibra’s VP of product, tells me. (Given the late send on today’s Ledger newsletter, I can empathize.)
- One of the most significant technologies associated with Libra is a new programming language called “Move.” The language is designed to safely move around digital assets that are tied to a blockchain, the database tech that underpins cryptocurrencies. Sam Blackshear, a Facebook software engineer who is one of the architects, assures me the name is not a reference to Facebook’s erstwhile battle cry, “Move fast and break things”; rather, it’s a reference to an esoteric programming concept called “move semantics.” The Move team’s unofficial motto is more circumspect: “Move language doesn’t break things.”
- If Calibra lets third party developers build their own digital currency features for the wallet, the business impact could be monumental. “We believe this new financial infrastructure could be viewed similar to Apple’s introduction of iOS to developers a decade ago,” says Zachary Schwartzman, an analyst at RBC Capital Markets. Calibra could be as important to Facebook as the iPhone was to Apple, in other words.
There is plenty more in the feature. You can pick up a copy on newsstands later this month, or read a digital version on Fortune.com tomorrow.
Happy holidays, dear readers. The Ledger will be on winter hiatus until January 8th.
See you in 2020.
DECENTRALIZED NEWS
This edition of The Ledger was curated by David Z. Morris. Contact him at david.morris@fortune.com.
Credits
Twitter is starting work on an open-source standard for social media, with Jack Dorsey citing blockchain as a possible part of the solution … Brex, which issues corporate credit cards to startups, raises $200 million in debt from Credit Suisse … Digital startups in Asia are challenging banks, but also losing money … Paypal COO Bill Ready will join Google as head of commerce … The Winklevii's Gemini will run crypto custody in a pilot for State Street … Russia's largest darknet market, Hydra, is selling cryptocurrency to fund expansion, including hiring chemists to check the quality of illegal drugs.
Debits
Creditors of collapsed crypto exchange QuadrigaCX are asking the Mounties to exhume founder Gerald Cotten's body to prove he's dead … A Venmo glitch sparks a "schoolyard fight" between fintech and big banks … Russia freezes dozens of bank accounts linked to opposition leader Alexei Navalny, but he's raising money with bitcoin … Crypto exchange Kraken acquires OTC desk Circle Trade, just weeks after Circle's retail crypto exchange Poloniex was also sold off … Mozilla Foundation stalwart Brendan Eich's new project, Brave, may not be as bold as it claims … The SEC's pursuit of cryptocurrency "ICOs" continues with charges against Eran Eyal, who pled guilty … and nobody knows what women want better than crypto bros.
Share Your 2020 Predictions!
Dear Readers: 2019 has been a heck of a year. Our readers were most interested in Visa's big investment in crypto custody startup Anchorage, Credit Karma's 'high yield' savings accounts, the massive faux-crypto pyramid scheme OneCoin, a unicorn that's also a Hippo, and Peter Thiel's big bet on crypto-mining in Texas.
But what's coming next year in financial technology and blockchain? We want to hear from you - email your comments, tips, and projections, along with anything you want to share about yourself, to ledger@fortune.com. We'll include the most insightful and/or hilarious comments in a Ledger edition early next year.
BUBBLE-O-METER
-99.3%*
*in twelve days
That's how much early investors in HEX, a complex new cryptocurrency project, could have lost, according to calculations by a trading group. HEX has been widely scrutinized and criticized, with one analyst concluding that the project is inherently structured to enrich its founder, Richard Heart.
(Please do not ask us to calculate the annualized losses. Please.)
FOMO NO MO'
No one has ever increased their risk by focusing, and ConsenSys is no different . . . I expect a big 2020 from them, and wouldn’t be surprised to see a nine figure investment from a strategic partner like Microsoft.
Filed under "ConsenSys resurgent?", optimism about the Ethereum-focused development studio is just one of the bold takes peppered throughout Messari Research's comprehensive new "Crypto Theses for 2020" report. Other projections and judgments include: continued growth for blockchain-backed "decentralized finance" tools like Maker, that bitcoin's Lightning Network will have an "irrational exuberance moment," and that Ethereum will not overtake bitcoin in market value anytime soon.
THE LEDGER'S LATEST
Minority Home Buyers Get Better Mortgage Rates from Algorithms - Jeff John Roberts
One Country’s Grand Plan to Promote a Cashless Economy: Fine the Laggards Who Pay with Cash - Stelios Bouras
Three Economic Lessons from Paul Volcker's Career - Erik Sherman
New California Law Giving Consumers Control of Their Data Sets Off a Scramble - Jeff John Roberts
Whiskey Distillers Stare Down the Barrel of a 400% Tax Hike - Nicole Goodkind
Pounds, Bonds, and Blue Chips Soar in the U.K. after Tory Victory - Adrian Croft
Markets Show Phase One Trade Deal Between the U.S. and China is 'No Victory' - Erik Sherman
MEMES AND MUMBLES
Dallas Mavericks owner and crypto-skeptic Mark Cuban mixed it up with bitcoin advocates, pushing back on the idea that bitcoin is 'hard' money, and revealing that in two periods of accepting bitcoin payments, the Mavericks processed only five transactions.
