Remember Libra and Diem, the virtual currency project launched by Facebook/Meta in 2019? (Here's what I wrote about it back then.) The Financial Times has a great inside story of what happened to cause that project to collapse. Basically, Facebook happened:
What emerges is a picture of Silicon Valley executives who thought they could charge into finance and make billions, if only they could surmount technical and regulatory barriers. What they failed to realize was that the very fact Facebook had conceived the idea, doomed it. As one government official involved in the process puts it: “Diem spent years trying to reverse engineer their project to fix all of its faults. But they could never fix being linked to Facebook. It was their original sin.”
Read the whole thing here, which ends by casually noting that Meta is now working on making a Metaverse. Left unsaid there is the painfully obvious point:
If Meta's reputation is so bad among government regulators in both the US and EU that it can't launch a virtual currency, what hope does Meta's Metaverse have with a virtual world?
Because a metaverse by definition is not only integrated with the real life economy -- usually through a virtual currency like Diem -- but comes with about as many demands, as the real world: Cross-national governance, community management, regulation around commerce and expression, the status of minors, protection around under-represented / marginalized communities, and on (and on). Regulators who were brutally critical of Meta's virtual currency are likely to be just as critical around these other topics, if not more so.
It's been speculated that Meta may one day break off its Reality Labs/metaverse projects from the mothership, so it can avoid anti-trust and other issues, and that may help some. But then again, if one or more of Meta's founders and lead executives are part of that transition, Meta's brand problems will inevitably follow along.
Image credit: Reuters.
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