The founding members of the Libra Association Charter gathered in Geneva, Switzerland, on Monday to sign a governance structure and to appoint board members to the cryptocurrency organization amid mounting skepticism of the proposed Libra as another company dropped out of the Facebook-initiated project.
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Among the 21 companies that have signed on as representatives as of Monday are venture capital firm Andreesen Horowitz, Uber, Spotify AB, Lyft and Vodafone.
Meanwhile, Booking Holdings became the latest company to pull out of the project.
Stripe, Mastercard, Visa, eBay and Paypal had already dropped out.
“A project announced on June 18 that has sparked an enormous global conversation with a blend of excitement … and apprehension would invariably reframe the calculus for organizations that had wanted to join,” Dante Disparte, Libra’s head of policy and communications, told FOX Business. “What we’re building is a resilient structure.”
Twenty-eight companies were expected to join the project, each committing $10 million. The design of the payment system does not preclude any of these companies from contributing to the ecosystem or accepting Libra payments in the future.
About 1,500 organizations have expressed some interest in the project, according to Disparte, who declined to comment on the investment status.
Concerns have been raised about whether the cryptocurrency will receive regulatory approvals around the globe, as lawmakers in the U.S. express mounting concerns.
Treasury Secretary Steven Mnuchin said in July he is “not comfortable” with Facebook launching Libra, adding the group has “a lot of work to do before they get us comfortable.”
Disparte noted the group is focused on ensuring the technology and governance are right, while regulatory approvals will require ongoing dialogues.
Libra co-founder David Marcus hinted in a tweet on Friday that the pressure on companies “has been intense” regarding regulatory clarity.
Mnuchin also mentioned there are concerns about “privacy issues,” after Facebook was fined a record $5 billion by the Federal Trade Commission over privacy abuses. The company is also the subject of ongoing probes from the FTC and lawmakers.
Trust is an important piece of the puzzle for consumers who would be using the payment infrastructure. Disparte pointed to the inclusion of other payment providers and the fact that the code is open-sourced as two reasons why Facebook’s own privacy problems shouldn’t discomfort potential users.
“Whether you trust Facebook, the trust of the Libra project – the Libra payment system and network is not dependent on that,” Disparte said, adding the company has been “a key contributor” to the project and “deserve a little more credit than they’ve received.”
Not only is software open-sourced, but Facebook has also built a firewall between social and financial data.
The goal of the project is to serve “billions” of consumers who do not have access to any financial system, who produce risk because they are endemically impoverished and participate “economically in the shadows,” Disparte said.
Facebook unveiled plans to offer a digital wallet, which would allow for the instant transfer of money across the globe, providing banking options for people with limited access. It has said it will be one of a consortium of dozens of companies that would participate in the Libra Association – an independent entity that would manage the cryptocurrency.
On Monday, five individuals were elected to the Libra Association board: Kiva Microfunds’ Matthew Davie, PayU’s Patrick Ellis, Andreesen Horowitz’s Katie Haun, Calibria’s David Marcus and Xapo’s Wences Casares. Each council member has one vote and decisions will require a super-majority.
Zuckerberg is expected to testify before U.S. lawmakers regarding Libra later this month.