For those who came in late, Facebook is signing up to a bitcoin-based Libra system and governments are worried that it will be used to set up the social notworking site as an “independent state” which could ignore financial regulations.

In Facebook's original vision, Libra would be an open and largely decentralised network. The core network would be beyond the reach of regulators. Regulatory compliance would be the responsibility of exchanges, wallets, and other services that are the "on ramps and off ramps" to the Libra ecosystem. Facebook now seems to recognise its original vision was a non-starter with regulators.

David Marcus, the head of Facebook's new Calibra payments division, appeared before two hostile congressional committees and said the Libra Association will shoulder significant responsibility for ensuring compliance with laws relating to money laundering, terrorist financing, and other financial crimes.

If the Libra Association does have a mechanism for forcing compliance, that inherently raises the bar for entering the market and makes the Libra network look more like conventional financial networks -- with all the red tape that entails.