Christian Catalini, co-maker of Facebook’s Libra project, warned on Friday that the pace of Stripe and the arch of Circle could succeed commercially, but at the expense of the ideal of Cryptos Decentralization.
Libra was launched in 2019 and was the daring bid from Meta to create a global digital currency that is supported by a basket with stable assets. The project promised to make payments as seamlessly as messages, but it led to the immediate recoil of supervisors who were concerned about financial sovereignty, systemic risk and user privacy. By 2022, scales – renamed Diem in an attempt to reset the statue – was closed and his assets were sold.
Catalini, who served as Chief Economist of Libra, used his thread of 5 September on X to visit the early compromises of the project and to explain why they matter now. He said that the original open design, developed with Harvard -economist Scott Kominers, was reduced to a short appendix after months of legal negotiations.
The first major retreat, he wrote, left non-required portfolios. Regulators insisted on a ‘clear perimeter’, which means that a responsible intermediary with whom they could contact – and punish – if problems arose.
For supervisors who were used to mediate, a world where users really held their own money was unmanageable. “For them, killing self -wort was not a choice, it was an obvious necessity,” he remembered.
Catalini noticed the irony: today open networks are developing compliance tools that are native to blockchain that could have tackled these worries more effectively than traditional frameworks. But then Libra was forced to strip decentralization, a change he described as an early signal from where companies led by companies went.
His wider lesson was grim: “As long as there is one throat for choking – or a committee of them – you can’t really re -wander the system again. Even worse, every network with an architect lives in borrowed time.”
Bow and pace in the spotlight
Catalini placed the pace of Stripe and the bow of the circle in that context. Both are new block chains that are explicitly designed for payments, promoted as Stablecoin-first infrastructure for companies and fintechs.
Circle launched ARC on 12 August and presented it as a Layer-1 network that was specially built for Stablecoin Finance. In contrast to public chains that depend on volatile gas socks, ARC uses USDC for reimbursements and offers predictable, dollar-nominated costs.
It integrates a built-in currency engine, promises sub-second finality and includes opt-in privacy functions. Circle said that ARC will support cross-border payments, onchain credit systems, tokenized capital markets and programmable, automated payments.
Only a few weeks later, Stripe and Paradigm revealed the pace on 4 September and describe it as a blockchain-first blockchain that can process more than 100,000 transactions per second.
The network is EVM-compatible, has a special payment strip with support for memos and access lists and allows users to pay both transactions and gas in any stablecoin. Stripe said that early design partners Visa, Deutsche Bank, Revolut, Nubank, Shopify, OpenAi, Anthropic and Doordash are.
Both projects were marketed as steps in the direction of mainstreaming Stablecoin payments. But for Catalini they raised a deeper concern.
A revolution or a failed coup?
Catalini argued that companies guided by companies such as bow and pace risk simply rebuild the old financial system with new players who are in charge. Instead of moving map networks and banks, he warned that they could raise Fintech Giants to the same dominance position. “The throne will have new passengers, but it will be the same throne,” he wrote.
He also predicted that such networks would break geopolitically, whereby unlikely Western and Eastern blocks would share a single infrastructure led by companies. The result, he said, would compete with financial rich instead of the early proponents of the GrenzoSe system crypto that had in mind.
In the end Catalini described the pace of Stripe as a “referendum on the spirit of Libra.” If it thrives, he suggested, it can prove that scale has failed because of timing, not for design – and show that the dream of open, permissionless money has been overtaken by more pragmatic, centralized solutions.