stablecoin-regulation

Between July and September 2019, Facebook's Libra project encountered intense regulatory scrutiny and skepticism across multiple jurisdictions, including Europe, the US, and Asia. Regulators emphasized stringent requirements for stablecoin compliance, international coordination, and raised concerns about financial stability, privacy risks, and antitrust issues. Despite Facebook's efforts to update its white papers and engage with authorities, consumer distrust and internal challenges within the Libra project persisted.

In November 2019, Facebook's Libra project faced significant regulatory and public skepticism, leading to a strategic retreat and repositioning. Despite regulatory hurdles and waning enthusiasm, Facebook continued to push Facebook Pay, a simpler payments solution leveraging existing financial infrastructure, while Libra Association adjusted its mission and membership. Mark Zuckerberg's public communications shifted away from Libra, focusing instead on a broader vision of decentralized financial opportunity by 2030.

The chapter "11 Stablecoins" provides a comprehensive analysis of stablecoins, tracing their historical roots from systems like the WIR mutual credit network to modern digital currencies such as Tether. It introduces a technology-neutral definition and a novel tripartite classification based on redeemability rationales—claim-based, good faith-based, and technology-based—linking these to regulatory and operational considerations. The chapter further explores stablecoin use cases, revenue models, regulatory frameworks, and their disruptive potential to challenge traditional financial systems and notions of money.