Christian Catalini, co-creator of Meta’s now-defunct Libra project, took to X to explain how Stripe’s Tempo blockchain fails one of the basic tenets of the crypto movement: decentralization.

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.

The failure of Libra—what really killed it

Catalini noted that in the tech and finance industry, being too early to the market is almost the same as being wrong. In his post, Catalini wrote:

“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.”

Problems with corporate blockchains like Tempo

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.

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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.”

How the success of Tempo is linked to the future of crypto

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.”

Mentioned in this article

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Hassan Shittu

Journalist

Hassan Shittu

About Author

Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in…

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June 3, 2025

Senator Elizabeth Warren is moving to tighten a provision in the bipartisan GENIUS Act that she says creates a loophole for cryptocurrency wallets, one she warns could directly benefit President Donald Trump and his family.

Warren alleges that Republicans quietly added a last-minute exemption for crypto wallet providers in the GENIUS Act, a move she claims was designed to benefit Trump’s growing involvement in the industry.

According to Warren, this loophole could allow the Trump family to bypass essential regulatory scrutiny while launching products like their planned crypto wallet tied to the USD1 stablecoin.

“The American people deserve transparency and integrity, not backroom deals to enrich former presidents,” Warren said in a social media post announcing her amendment.

She warned that she won’t support the bill unless the wallet exemption is removed and strict anti-corruption measures are added.

Trump’s Crypto Moves Spark Ethics Alarm

At the center of this political storm is World Liberty Financial (WLFI), a firm reportedly backed by the Trump family. WLFI launched the USD1 stablecoin in March and is now believed to be developing an integrated crypto wallet platform.

These developments have intensified scrutiny from Democratic lawmakers, who argue that the GENIUS Act, if passed without proper safeguards, would effectively grant a green light to Trump’s crypto ambitions.

Senator Jeff Merkley (D-Ore.), a longtime ally of Warren on financial oversight issues, has also raised concerns.

“We cannot allow legislation to open doors for influence peddling or profit schemes tied to former presidents,” Merkley said during a Senate briefing.

The controversy stems from a provision in the GENIUS Act that allegedly exempts certain crypto wallet services from oversight if they operate outside direct custody models.

Critics say this clause could shield entities like WLFI from accountability, despite managing wallets linked to high-volume stablecoin transactions.

This comes on the heels of a $2 billion stablecoin investment deal between WLFI and a sovereign wealth fund in the United Arab Emirates, further fueling accusations of international influence and profit-making tied to Trump’s political brand.

Warren’s amendment reportedly includes a prohibition on any sitting or former president and their immediate family from profiting off stablecoins, wallet infrastructure, or related services.

It would also mandate full disclosure of any financial interests in digital asset ventures by political officeholders and candidates.

Will Congress Close the Door on Political Crypto Profit?

The GENIUS Act is considered a landmark attempt at establishing comprehensive federal regulation for stablecoins.

It includes mandates for 1:1 reserves, defines payment stablecoins, and assigns oversight responsibilities; provisions welcomed by many in the crypto industry seeking regulatory clarity.

Warren and her allies argue that the bill doesn’t go far enough to prevent corruption. Without tighter restrictions, they say, it creates an opening for political elites to leverage insider access and shape crypto rules for personal gain.

“We’re not just regulating finance—we’re protecting democracy from being sold to the highest bidder,” Warren told reporters.

On May 19, the U.S. Senate took a key step toward regulating stablecoins by advancing the GENIUS Act with a bipartisan vote of 66-32. The vote followed a week of intense negotiations, with 16 Senate Democrats joining Republicans to overcome a previous deadlock.

The bill, co-sponsored by Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.), would establish clear rules for stablecoin issuance and federal oversight.

It now heads to the Senate floor for debate and is expected to have enough support to proceed to the House.

However, concerns are growing over a proposed amendment from Warren, which some in the crypto industry say could jeopardize the bill’s progress.

Critics argue the amendment may discourage future public-private partnerships, while supporters insist ethical safeguards are necessary to prevent political favoritism in the growing digital finance sector.

Meanwhile, in a joint statement on June 2, four leading industry groups—the Blockchain Association, Crypto Council for Innovation, Chamber of Digital Commerce, and DeFi Education Fund—urged lawmakers to keep the bill focused, warning that unrelated amendments could derail long-overdue regulatory clarity.