Facebook’s crypto plans in jeopardy as Libra Association ‘founding members’ drop out
Facebook’s plans for launching a cryptocurrency called Libra have faced backlash from lawmakers since the day Facebook announced its plans on June 18. Politicians from Rep. Maxine Waters (D-CA) to Sen. Mark Warner (D-VA) called for the company to curtail its crypto venture. Some elected officials have gone so […]
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Facebook’s plans for launching a cryptocurrency called Libra have faced backlash from lawmakers since the day Facebook announced its plans on June 18. Politicians from Rep. Maxine Waters (D-CA) to Sen. Mark Warner (D-VA) called for the company to curtail its crypto venture. Some elected officials have gone so far as to compare the potential damage of Libra to the subprime mortgage crisis and to 9/11.
When Facebook announced Libra, it also announced 28 “founding members” in the Libra Association, the governance group set to be headquartered in Geneva. (The New York Times reported in late June that none of the companies identified as founding members had actually signed binding agreements.) Through more than three months of scrutiny, those partners hung around—until this month.
The inciting event on Friday could have been a letter this week that Sen. Sherrod Brown (D-OH) and Sen. Brian Schatz (D-HI) sent to Visa, MasterCard, and Stripe warning them about the risks of Libra.
Amid the Friday afternoon exodus, Sen. Brown’s office sent out this statement to media: “Large payment companies are wise to avoid legitimizing Facebook’s private, global currency. Facebook is too big and too powerful, and it is unconscionable for financial companies to aid it in monopolizing our economic infrastructure. I trust others will see the wisdom of avoiding this ill-conceived undertaking.”
Standing by Libra
To be sure, some in the industry are bullish on Libra even without its big-name backers. Kristin Smith of the Blockchain Association, a trade group that represents crypto and blockchain companies (but not Libra) told Yahoo Finance after PayPal dropped that the reaction to PayPal’s exit was “overrated” and that “at this point the adoption of crypto on a mass scale is inevitable, whether it be through Libra itself or some of these other companies out there, and lawmakers know it.”
And some of the founding members have responded to a Yahoo Finance inquiry confirming that they are still on board with the Libra Association.
Kiva, a non-profit micro-lending platform, confirms it is still a member.
Anchorage, a cold-storage crypto company, is still in the Libra Association. Anchorage co-founder and president Diogo Monica tells Yahoo Finance, “Anchorage is dedicated to continuing the mission of the Libra Association, and is proud to be a founding member, having worked on the project from the start.”
MercyCorps, a humanitarian aid charity, is still in, and tells Yahoo Finance, “We are maintaining our relationship with the association and we remain committed to ensuring that the voice of the world’s most vulnerable people are heard in the formation of this initiative, and that digital financial services include them and their needs.”
Cutting ties with Libra
Yahoo Finance will track all the dropouts here and continue to update this post when more companies exit.
This post was last updated on Oct. 11 at 5:35pm EST.
PayPal was first to drop out, on Oct. 4, and said at the time, “We remain supportive of Libra's aspirations and look forward to continued dialogue on ways to work together in the future.”
Ebay exited on Friday, Oct. 11, and told the Financial Times, “We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member. At this time, we are focused on rolling out eBay’s managed payments experience for our customers.”