The Libra charter has been signed by 21 organizations, just days after several high-profile payment processing and e-commerce companies withdrew from the controversial stablecoin project led Facebook.
The Libra Association named its board of directors and formed the consortium’s executive team during a conference held in Geneva, Switzerland.
Facebook is moving forward with Libra along with Calibra CEO and former Facebook blockchain head David Marcus, who’s now part of the project’s five-person board. Other Libra Association board members include Kathryn Haun, general partner at VC firm Andreessen Horowitz; Matthew Davie, chief strategy officer of Kiva; and Patrick Ellis, general counsel at PayU.
Former PayPal employees Bertrand Perez, Dante Disparte and Kurt Hemecker will also take senior management roles in Libra Association’s executive team.
The association consists of San Francisco-based crypto exchange Coinbase, crypto cold storage solutions provider Xapo, Anchorage, Bison Trails, Creative Destruction Lab, Andreessen Horowitz, Thrive Capital, Ribbit Capital, Union Square Ventures, Breakthrough Initiatives, Illiad, Vodafone, Farfetch, Uber, Lyft, Kiva, Mercy Corps, Women’s World Banking, Spotify and PayU.
Announced in June 2019, the Libra Association will be leading Facebook’s controversial stablecoin project. When first introduced, the Libra project was supported by 28 major companies. Since then, PayPal, Visa, Mastercard, Booking Holdings, eBay, Stripe and Mercado Pago have withdrawn from Libra initiative due to regulatory concerns.
Despite these major exits, the Libra Association noted on October 14 that over 1,500 organizations are interested in joining the initiative. Only 180 entities meet the association’s membership criteria. In order to join, a two-thirds vote by Libra’s 21 board members is needed.
Facebook’s management had previously said it was expecting a consortium of 100 organizations to back the crypto project at launch in 2020. No recent updates or confirmations have been provided regarding these plans or the initiative’s launch date.
In June 2019, Facebook revealed a bold and ambitious vision for a global cryptocurrency that would help provide financial services to the world’s unbanked population.
The Libra token’s governance would be overseen by the Association members, which would consist of a consortium of 100 organizations that will vote on technical matters related to the development of the project’s Libra Investment Token. The token would also serve as a security, allowing investors to earn interest from a basket of major fiat currencies pegged to the digital asset.
If it launches, the stablecoin will be supported by a basket of fiat currencies including the USD (50%), the euro (18%), the yen (14%), the British pound (11%) and the Singapore dollar (7%).
Regulators and lawmakers throughout the world have heavily scrutinized the project, warning that Libra might pose a threat to the existing financial system. France and Germany have said that they want to ban Facebook’s stablecoin initiative, meanwhile, Indian authorities stated that the cryptocurrency might not be legal in the country. US Democratic Representative Maxine Waters said that the project should be put on hold until all regulatory requirements have been addressed.
Marcus has said that these fears or concerns are misplaced. He also testified before the US Congress in July 2019, attempting to address the issues raised by the Senate Banking Committee and the House Financial Services Committee. Facebook CEO Mark Zuckerberg will also be testifying next week.
Marcus published a letter stating that Libra project developers welcome regulatory feedback and oversight, and that the stablecoin would not serve as a replacement for the US dollar.
However, the CEOs of Visa, Mastercard and Stripe were asked by US Senators Brian Schatz and Sherrod Brown about whether the companies could face increased regulatory scrutiny if they continue to take part in the project.
It is Unclear when Libra Will Actually Launch.
Although Facebook initially planned an early to mid-2020 launch for Libra, statements recently made by Zuckerberg have suggested it could take longer. It now seems that any delay will be due to regulatory reasons.
In July 2019, Zuckerberg noted during a quarterly earnings call that the social media firm would take “however long” it’s required to address concerns raised by regulators. Last month, he hinted at the possibility that Libra might take several years before it’s launched.
It remains unclear whether Libra will actually be able to launch and whether the team developing the cryptocurrency will consist only of Facebook subsidiary Calibra employees or other association members as well.
Facebook’s management has formed a team in Geneva, and previously revealed it was hiring for blockchain-related roles at Menlo Park, California and Tel Aviv, Israel.
Although some of Libra project’s codebase has been open-sourced, Facebook’s management has not shared many details regarding the initiative since announcing it in June.
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Author: Omar Faridi
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