Facebook\'s Libra forms governing council after big names abandon the project

Libra Association Holds Inaugural Meeting Forms Board

The Libra Association presently has 21 members, including venture capital firms, non-profits, and blockchain companies. The Financial Times first reported eBay's exit, while Bloomberg editor Joe Weisenthal first noted the Stripe and Mastercard moves.PayPal had pulled out the previous week.

Facebook disclosed last June that it will spearhead the roll-out in 2020 of an electronic currency controlled by the not-for-profit Libra Association headquartered in Switzerland.

Haralambous points out that South Africans broadly aren't very aware about Libra in its current form but if Libra ever gets off the ground, it's going to be baked into the biggest communication platforms in the world (Facebook, WhatsApp, Instagram, etc). One of the main criticisms levied at the project from the cryptocurrency industry-proper is that if Libra is widely adopted, there will be far too much control in the hands of Facebook, a company itself with a questionable record of protecting its users' interests. Nevertheless, more bullish news around the project is popping up.

Earlier this month, sources told The Wall Street Journal that Visa, Mastercard, PayPal Holding, and Stripe were all leaning toward leaving the Association.

A draft report from the Group of Seven (G7) nations - France, the U.S., Japan, Canada, Italy, Germany and the United Kingdom - has said that no stablecoin project, including Facebook's Libra, can go ahead until it is proven safe and secure.

In a separate document the Financial Stability Board (FSB), which coordinates rules for G20, noted stablecoins like Libra pose various challenges to financial stability and investor protection, among others.

The report, which doesn't specifically name Libra, says that all backers of digital currencies must be legally sound, protect consumers, and make sure that their coins are not used for criminal activity. Of course, it's not great news in the short term, but in a way it's liberating. Analysts and crypto industry leaders are highlighting geopolitical implications of China launching a digital currency first - especially if libra hits a brick wall with US regulators. Regulators are also concerned that the project would facilitate money laundering.

Facebook's Libra has been bashed by regulators and politicians around the world, and was even asked to cease the development of Libra.

To cool things down a little, not all people have this hard stance on cryptocurrency regulation and a good example with that respect is Harold J. Ford, a former US Congressman who argued that lawmakers should have a more nuanced approach on this matter.

I would not like to strike the initiative for now, but the work of the Libra Association has become much more hard.



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