In fact, Catalini believes that if Stripe’s Tempo succeeds commercially, it would mean that early crypto idealists will have to embrace a future where the original ethos of decentralization is lost. Catalini used the example of Libra’s failure to demonstrate his point.
“Looking back on Libra, the stablecoin project I helped design inside Meta, I can confirm we weren’t just early; we were also comically, spectacularly wrong.”
Besides the unfortunate timing, several other factors contributed to Libra’s ultimate failure. This included the “Silicon Valley hubris—the belief that elegant code can simply wish away centuries of financial regulation,” Catalini wrote.
Additionally, Facebook’s aggressive marketing of Libra not only drew more attention, but also provided ammunition to its opponents.
According to Catalini, there is a prevalent misconception that Libra failed because it could not meet regulatory guidelines. However, the opposite is true, Catalini wrote, adding:
“The reality is that we were on the verge of becoming the most buttoned-up, regulator-friendly crypto project on the planet.”
Catalini wrote:
“The problem with corporate chains like Tempo isn’t a matter of code—it’s a matter of incentives. We already know the script.”
This is how corporate blockchains usually work: a tech firm creates a blockchain and promises fairness. But after capturing a substantial chunk of the market, the temptation to tilt the playing field in their favor becomes nearly irresistible.
And “crypto’s purpose is to break this cycle of broken promises,” Catalini wrote, adding:
“It’s the same fundamental economic truth we identified at MIT almost a decade ago: the only thing that truly separates crypto from the systems it aims to replace is that it’s permissionless.”
Libra engineers decided to sacrifice the permissionless aspect of the network. Similarly, the network had to also scrap its plan of non-custodial wallets because regulators would not approve of it. Regulators needed to know who to call or fine when things go wrong, he explained.
“A world where users truly control their own money is messy, borderless, and doesn’t fit that legacy blueprint. For them, killing self-custody wasn’t a choice, it was an obvious necessity based on the tools they understood.”
According to Catalini, if corporate blockchains like Tempo and Circle’s Arc succeed, it would indicate that “the crypto experiment was not a revolution, but a failed coup.” This is because while the backend technology will be different, the market structure will remain “eerily familiar,” he wrote.
In fact, Catalini described it as a change of kings while the throne remains the same—fintech giants will replace existing card networks and financial institutions. He further surmised that it is likely the markets in the West and the East will be controlled by at least two competing empires.
Catalini believes that if Libra’s demise could be wholly chalked up to bad timing, then Tempo’s success is nearly inevitable, given the change in regulatory stance. And in such a case, “the crypto world’s original dreamers may finally have to accept a more pragmatic, centralized reality.”
However, he warned:
“But if Libra’s ghost is a warning about a fundamental truth—that any system with a single architect is built on a fatal flaw—then Stripe is not writing a new story. It is merely staging an entertaining, and very expensive, sequel.”
