As Google and other major enterprises take part in Hedera’s 39-member governance council, a number of companies have left Facebook’s Libra Association, a project that aims to create a global cryptocurrency-based payments network. Despite backlash from regulators and government officials, companies such as PayPal, Mastercard and Visa initially joined Libra’s governance council.
According to Harmon, Libra’s governance model resembled that of Hedera. He explained that when Libra was announced during the summer of 2019, Hedera had placed a full-page advertisement in the Wall Street Journal calling out Facebook for stealing its model. The ad read:
“Thank you Facebook Libra. Imitation is the sincerest form of flattery. It’s been their internet for too long. Make it yours.”
Harmon explained that the ad was meant to validate Hedera’s governance model. Yet, with a seemingly identical governance model to Hedera — which allows members to run individual network nodes on their own infrastructures and then vote on crucial network decisions – some may be wondering where Libra went wrong. Since Libra was unveiled, at least seven major companies have dropped out, including Mastercard, PayPal and Visa.
Harmon said that Libra has always faced a much tougher regulatory environment in comparison with Hedera. He also said that Hedera has understood from the beginning the importance of working closely with regulators to conduct business properly in the United States,
“This isn’t to say that Facebook didn’t talk to regulators, but they also created a stablecoin from a basket of different currencies. That creates an additional layer of regulatory complexity that we never had to deal with.”
Harmon also noted that Hedera’s focus is entirely different from Libra’s: “We don’t have a stablecoin or payments solution. Our focus here is to build a new layer of the internet, based on trust — not a global payments solution.” While this may be, some skeptics argue that Hedera Hashgraph lacks decentralization, as its network is essentially being governed by major enterprises.