Hostname: page-component-cd9895bd7-dzt6s Total loading time: 0 Render date: 2024-12-26T16:13:36.618Z Has data issue: false hasContentIssue false
  • English
  • Français

Cutting the network? Facebook's Libra currency as a problem of organisation

Published online by Cambridge University Press:  09 November 2023

Daniel Tischer
Daniel Tischer*
Affiliation:
University of Bristol, UK
*
Corresponding author: Daniel Tischer, Department of Management, University of Bristol, 2.06 Howard House, Queen's Avenue, Bristol BS8 1SD, UK. Email: daniel.tischer@bristol.ac.uk.
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

This essay explores the organisational character of Facebook's Libra currency by undertaking a critical reading of documents published by the Libra Association. Drawing on the conceptual work of Marilyn Strathern and Michel Serres, it illustrates how ownership cuts the network and encourages parasitism as a means of driving future profit. Central to this is the claim that Libra is not an exercise in democratising money, but rather, the opposite: Libra is run as a club, for the benefit of club members. The conceptual theme of ‘cutting’ is used to organise the argument. Rather than a cutting-edge technology, Libra's true innovation is organisational and consists in overturning the decentralised character of blockchain, such that distributed ledger technology is re-centralised by big tech firms. Outsiders are thus cut-off from Libra; only those inside the club have the right to participate in Libra and its governance. This position also affords members an exclusive capacity to take a cut of the profits generated through Libra. As a private organisation, members have sole rights to future profits generated from the Libra ecosystem and are in this way incentivised to create new product opportunities over time.

Keywords

FacebookLibradigital paymentscryptocurrenciesorganisationclubnetwork
Type
Essay
Information
Finance and Society , Volume 6 , Issue 1 , 2020 , pp. 19 - 33
Creative Commons
Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-No Derivatives licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits noncommercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
Copyright
© 2020 The Author(s)

References

Armstrong, R. (2020) Mastercard chief speaks out against nationalism and Facebook. Financial Times, 3 February.Google Scholar
Baldwin, J. (2018) In digital we trust: Bitcoin discourse, digital currencies, and decentralized network fetishism. Palgrave Communications, 4(14): 1–10.Google Scholar
Baradran, S. (2019) Facebook's cryptocurrency won't help the poor access banks. Here's what would. Washington Post, 29 October.Google Scholar
Birch, D. (2014) Identity is the New Money. London: London Publishing Partnership.Google Scholar
Bokat-Lindell, S. (2019) Can we trust Facebook to run a bank? New York Times, 24 October.Google Scholar
Brown, S.D. (2013) In praise of the parasite: The dark organizational theory of Michel Serres. Informática na Educação: Teoria e Prática, 16(1): 83–100.Google Scholar
Brown, S.D. and Reavey, P. (2017) Dark organizational theory. Journal of Cultural Economy, 10(3): 280–95.CrossRefGoogle Scholar
Buchanan, J.M. (1965) An economic theory of clubs. Economica, 32(12): 1–14.Google Scholar
Burton, J. and Tam, D. (2015) Towards a parasitic ethics. Theory, Culture & Society, 33(4): 103–25.Google Scholar
Callon, M. (1986) Some elements of a sociology of translation: Domestication of the scallops and the fishermen of St Brieuc Bay. In: Law, J. (ed.) Power, Action and Belief: A New Sociology of Knowledge? London: Routledge, 196–223.Google Scholar
Callon, M. and Law, J. (1982) On interests and their transformation: Enrolment and counter-enrolment. Social Studies of Science, 12(4): 615–25.Google Scholar
Corbet, S., Lucey, B., Urquhart, A. and Yarovaya, L. (2019) Cryptocurrencies as a financial asset: A systematic analysis. International Review of Financial Analysis, 62(March): 182–99.Google Scholar
Dodd, N. (2018) The social life of Bitcoin. Theory, Culture & Society, 35(3): 35–56.CrossRefGoogle Scholar
Fratianni, M. and Pattison, J. (2001) International organisations in a world of regional trade agreements: Lessons from club theory. The World Economy, 24(3): 333–58.Google Scholar
Golumbia, D. (2015) Bitcoin as politics: Distributed right-wing extremism. In: Lovink, G., Tkacz, N. and de Vries, P. (eds.) Moneylab Reader: An Intervention in Digital Economy. Amsterdam: Institute of Network Cultures, 117–31.Google Scholar
Halliday, J. (1966) The club and the revolution in Scotland 1689-90. The Scottish Historical Review, 45(140): 143–59.Google Scholar
Hock, D. (2005) One from Many: VISA and the Rise of Chaordic Organization. San Francisco, CA: Berett-Koehler Publishers.Google Scholar
Jones, G.M. (2014) Secrecy. Annual Review of Anthropology, 43: 53–60.Google Scholar
Kelly, J. (2019) Blockchain: Disillusionment descends on fiancial services. Financial Times, 24 September.Google Scholar
LAD (2019a) The Libra Association. Document Version US-1. Downloaded: 6 July 2019.Google Scholar
LAD (2019b) The Libra Association. Document Version US-Rev0812. Downloaded: 12 February 2020.Google Scholar
Libra Blockchain Document (2019) The Libra Blockchain. Document dated 25 June 2019. Available at: <https://developers.libra.org/docs/assets/papers/the-libra-blockchain/2019-06-25.pdf/>. Accessed 15 February 2020..+Accessed+15+February+2020.>Google Scholar
Libra Membership Document (2020) How to Become a Founding Member. Document Version US-Revised012120. Downloaded: 23 February 2020.Google Scholar
LWP (2019a) An Introduction to Libra. Document Version US-1. Downloaded: 2 July 2019.Google Scholar
LWP (2019b) An Introduction to Libra. Document Version US-Rev0723. Downloaded: 29 August 2019.Google Scholar
LWP (2020) An Introduction to Libra. Document Version US-Revised012120. Downloaded: 12 February 2020.Google Scholar
Maurer, B., Nelms, T. and Swartz, L. (2013) ‘When perhaps the real problem is money itself!’ The practical materiality of Bitcoin. Social Semiotics, 23(2): 261–77.Google Scholar
Maurer, B. and Tischer, D. (2019) Facebook's Libra: It's not the ‘crypto’ that's the issue, it's the organisation behind it. The Conversation, 6 August. Available at: <https://theconversation.com/facebooks-libra-its-not-the-crypto-thats-the-issue-its-the-organisation-behind-it-121223/>. Accessed 15 February 2020.. Accessed 15 February 2020.' href=https://scholar.google.com/scholar?q=Maurer,+B.+and+Tischer,+D.+(2019)+Facebook's+Libra:+It's+not+the+‘crypto’+that's+the+issue,+it's+the+organisation+behind+it.+The+Conversation,+6+August.+Available+at:+.+Accessed+15+February+2020.>Google Scholar
Morisse, M. (2015) Cryptocurrencies and Bitcoin: Charting the research landscape. Presented at the 21st Americas Conference on Information Systems, Puerto Rico. Available at: <https://pdfs.semanticscholar.org/0835/a6fc11f34710d2622bf4ee306c66f5150da9.pdf/>. Accessed 15 February 2020..+Accessed+15+February+2020.>Google Scholar
Nelms, T.C., Maurer, B., Swartz, L. and Mainwaring, S. (2018) Social payments: innovation, trust, Bitcoin, and the sharing economy. Theory, Culture & Society, 35(3): 13–33.Google Scholar
Omarova, S. and Steele, G. (2019) There's a lot we still don't know about Libra. New York Times, 4 November.Google Scholar
Posner, E. (2019) The trouble starts if Facebook's new currency succeeds. The Atlantic, 26 June.Google Scholar
Sandler, T. and Tschirhart, J. (1997) Club theory: Thirty years later. Public Choice, 93(3/4): 335–55.Google Scholar
Schwittay, A. (2011) The financial inclusion assemblage: Subjects, technics, rationalities. Critique of Anthropology, 31(4): 381–401.Google Scholar
Scott, B. (2016) How can cryptocurrency and blockchain technology play a role in building social and solidarity finance? UNRISD Working Paper 2016-1, February: 1–25.Google Scholar
Scott, B., Loonam, J., and Kumar, V. (2017) Exploring the rise of blockchain technology: Towards distributed collaborative organizations. Strategic Change, 26(5), 423–428.Google Scholar
Serres, M. (1982) The Parasite. Baltimore, MD: Johns Hopkins University Press.Google Scholar
Stearns, D.L. (2011) Electronic Value Exchange: Origins of the VISA Electronic Payment System. London: Springer Verlag.Google Scholar
Stout, L. (2012) The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public. San Francisco, CA: Berett-Koehler Publishers.Google Scholar
Strathern, M. (1996) Cutting the network. The Journal of the Royal Anthropological Institute, 2(3): 517–35.Google Scholar
Swartz, L. (2018) What was Bitcoin, what will it be? The techno-economic imaginaries of a new money technology. Cultural Studies, 32(4): 623–50.CrossRefGoogle Scholar
Thomas, E. (2019) The ties that bind Facebook's Libra. Wired, 10 July.Google Scholar
Tischer, D., Maurer, B. and Leaver, A. (2019) Finance as ‘bizarre bazaar’: Using documents as a source of ethnographic knowledge. Organization, 26(4): 553–577.Google Scholar