The Libra Association that is created by Facebook to launch its new cryptocurrency has announced its 21 founding members after defections by previous supporters including Visa and Mastercard.
Libra Association Behind Facebook’s Cryptocurrency
The announcement came on Monday as the planned Libra global currency faces swelling criticism from regulators and reported warnings from the Group of Seven that it poses a threat to the global financial system.
The director-general Bertrand Perez said that the group kicked off its first council meeting in Geneva and founding members including Uber, Spotify and Vodafone formally signed onto the Libra Charter. He said, “We now have a total guarantee of their involvement, so we have confidence in the project.”
The non-profit association, last month, voiced hope that the number of companies backing it when it opened for business would swell from an initial 28 to “well over 100”. But the opposite happened. Instead of increasing the list has shrunk, after more of its initial backers walked away amid swelling criticism from regulators around the world.
Meanwhile, the owner of Priceline, Kayak, and Booking.com on Monday confirmed that it had pulled out of the group, which is trying to bring digital coins into mainstream commerce.
On Friday, the credit card giants Visa and Mastercard, online marketplace eBay and digital payments firm Stripe each announced that they had changed their minds about being founding members of the association, which was followed by a similar recent announcement by the digital payments firm PayPal. It leaves Facebook without the backing of any major payments firms for the project, due to launch by June 2020.
On Friday itself, the Libra Association also confirmed that the companies would no longer be founding members, but said it would continue building an alliance of businesses, social-good organisations, and others to implement the cryptocurrency.
Initially, its launch was originally planned for mid-2020, but now as per Perez, he had not ruled out a later start date. Being optimistic about reaching around 100 members as planned, he said, “What we want is to build a platform that is solid, that is there to last and that will survive in the long term.”
According to a fact sheet provided by the Libra Association, at the meeting in Geneva, members agreed interim articles of association laying out how the organization will be governed, as required by Swiss law.
However, the group elected five people to serve on the board, including Facebook’s David Marcus as well as representatives from PayU, venture firm Andreessen Horowitz, blockchain company Xapo Holdings Limited and non-profit Kiva Micro funds.
The association’s other prominent remaining members include Vodafone Group Plc and ride-hailing firms Uber Technologies Inc and Lyft Inc.
According to its website, its only payments firm remaining is Netherlands-based PayU, which does not operate in the United States, Canada or large swaths of Africa and the Middle East.
Meanwhile, the departure of major financial firms means Facebook can no longer count on a global player to help consumers turn their currency into Libra and facilitate transactions. France pledged last month to block Libra from operating in Europe, while the Bank of England laid out high hurdles it must meet before its launch. U.S. Federal Reserve Chairman Jerome Powell has also suggested the project could not advance before concerns were assuaged.
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