Is Facebook Forming A Crypto Mafia as Libra Foundation Members Boost Each Other’s Businesses?
It was announced this week that Anchorage, a crypto-native custodian for institutional investors, had raised $40 million in Series B funding. The funding was lead by Blockchain Capital, as well as with participation from Visa. While it is noteworthy that payment network giant Visa is investing in a young […]
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It was announced this week that Anchorage, a crypto-native custodian for institutional investors, had raised $40 million in Series B funding. The funding was lead by Blockchain Capital, as well as with participation from Visa.
While it is noteworthy that payment network giant Visa is investing in a young blockchain startup, what is even more intriguing is that both these companies are founding members of a potentially sizeable future business organization - Facebook’s Libra Association.
Anchorage has had an impressive rise to fame, rubbing shoulders with major players in their respective fields thanks to Libra. These include PayPal, Stripe, Mastercard, as well as Spotify, Uber, eBay, and of course, at the head of the table, Facebook.
Now, instead of merely finding themselves in a room with such companies, Anchorage has had a chance to showcase their wares through Libra's selection of them. It has led to Visa, as well as venture capitalists, and Libra Association founding members, Andreessen Horowitz, biting.
It would be difficult to draw out a timeline of the investment meetings Anchorage has had with Andreessen Horowitz, who led the $17 million Series A investment in January, and now Visa, but there certainly seems to be an overlap with the founding of the Libra Association.
Could it be that Facebook is not only looking to take the cryptocurrency world by storm and inflict its massive influence on digital currency, but it is also planting the seeds of a business mafia that sets the tone in this nascent space?
The right blockchain abilities
Anchorage’s business, devoid of any Libra links and Facebook ties, is still an attractive investment for enterprises looking to utilize the power of crypto in a mainstream manner. Anchorage aims to secure cryptocurrency holdings for institutional investors, but this opens a lot of doors for these institutions to utilize digital currencies in their operations.
Diogo Monica, Co-founder, and President of Anchorage spoke to Forbes about being the “Financial plumbing of the new crypto asset infrastructure.”
Monica explained Anchorage’s offering as supplying 'financial plumbing' for crypto assets that other companies can use in their budding cryptocurrency offerings. He also compared this to what Visa did with its ‘financial plumbing’ related to the emergence of card payments around the world.
“We are creating the financial plumbing, same as Visa,” said Monica. “They created the financial plumbing for card networks to be able to process payments, so merchant adoption and card acceptance became worldwide.”
“Libra is going to be built on top of this new financial plumbing. Libra requires custody services, every single member of the association will require custody services to store Libra and so will any other company that will want to interact with this new digital currency.”
Anchorage believes that what they can do is powerful enough to offer peace of mind and security for the likes of Visa, and of course, Facebook, to delve into the realm of digital currencies.
Their key market is institutions, and based on the recent investments and partnerships, they are attracting those parties. But, as institutions decide to take the plunge into crypto, and perhaps consider Anchorage as a provider for their crypto custody, one has to wonder how much legitimizing has been done through the Libra association.
A rising tide
Monica is relatively open in his appraisal of Libra and what it is going to do for the legitimacy and interest in digital assets. The fact that Facebook is boldly announcing it is going to create a digital currency, and that it has backing from billion dollar companies like Visa, Uber, PayPal, Vodafone and others in its founding members of the association, proves this is big business.
“I do think that the Libra initiative is a rising tide that raises all boats,” Monica proclaimed. “It raises the seriousness of using an underlying blockchain for transparency and financial transactions, and it lifts and legitimizes digital assets, this front-running new asset class that we are moving towards.”
“Libra is a rising tide for both cryptocurrencies and blockchain.”
Having got in on the ground floor of this rising tide, Anchorage is also receiving a lot of legitimization then, by the same argument. As one of only four blockchain companies in the Libra Association, and a startup with barely three-years of running experience, they have been placed in a position of privilege which has potentially upped their status.
Moreover, even if fellow Libra members Visa and Andreessen Horowitz were ready to invest before they all sat at Facebook HQ to hash out the association, it must have made opening the checkbook a little easier when hands were shook at Menlo Park, California.
Monica says clearly that Anchorage and Visa had been in discussion for some time, but he also adds that an acceleration is being witnessed with this type of partnership. So, perhaps Facebook’s Libra mafia was not purposefully formed to monopolize the space, but these companies coming together could help accelerate themselves into a position of institutional cryptocurrency leaders.
“I do think that Visa shares the same vision as Anchorage, for digital assets to become a central piece for global finance,” Monica said. “What we are seeing here is just an acceleration.”
“We have been talking to Visa for a long time. They have been the original fintech company; Visa was fintech before the term existed, and it has always been at the forefront of financial infrastructure.”
“They have been exploring this space for a while, and these two announcements are just back to back; it showcases an increase in excitement and acceleration for the whole industry.”
Worth the membership fee?
Facebook’s Libra Association is billed to a not-for-profit consortium that will help oversee the cryptocurrency, manage the technical aspects of the project, and work with regulators. It was formed with 28 initial members in Geneva but has aspirations of expanding to as many as 100 members with equal voting rights.
Being part of this association thus offers a lot for its members, as well as takes a lot from them in equal measure. The likes of Anchorage, Visa, Uber, Stripe, and all the others are offering their varying expertise to make this a successful mainstream cryptocurrency, but they also have their fingers in the pie.
While being a not-for-profit association, there are still other bonuses to enjoy for these members that extend past profit, and even early adoption and influence. It is still debatable if Anchorage would be attracting as much attention and investment if there was no such thing as the Libra Association, but they will undoubtedly be buoyed by having Visa and Andreessen Horowitz in their stable.
Facebook is now about to springboard the creating a leading cryptocurrency consortium to create the first iteration of a mass-marketable digital asset, potentially. All the while, those chosen providers are accelerating and getting the space excited while also spreading their connections laterally through the association.