Facebook-Led Libra Forms Governing Council After Big-Name Departures

GENEVA — Twenty-one organizations have signed the Libra Association charter, days after a slew of high-profile defections from the cryptocurrency project started by Facebook.

The Libra Association also named its board of directors and formalized the consortium’s executive team following a meeting in Geneva, Switzerland.

Facebook still remains a key player in the project with Calibra CEO and former Facebook blockchain lead David Marcus taking a seat on the five-person board. Other board members include Katie Haun, a general partner with Andreessen Horowitz; Wences Cesares, CEO of Xapo; Patrick Ellis, general counsel at PayU; and Matthew Davie, chief strategy officer of Kiva.

Bertrand Perez, Dante Disparte and Kurt Hemecker will take leadership roles in the association’s executive team. Hemecker, Perez and Marcus are all PayPal alums.

In addition to Calibra, the association consists of Coinbase, 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, according to a press release. No previously unknown members were listed.

The announcement comes following a number of major departures. When the Libra Association debuted in June, Facebook touted a roster of 28 major firms. However, Visa, Mastercard, PayPal, Booking Holdings, eBay, Stripe and Mercado Pago, announced their withdrawals from Libra over the past week, with some citing concerns over the regulatory backlash faced by the project.

Still, the Libra Association said Monday that more than 1,500 entities have expressed interest in joining the project, with 180 meeting the organization’s membership criteria. A two-thirds vote by the 21 board members is required to actually add any new members.

In June, Facebook said a consortium of 100 companies would back the cryptocurrency project at launch. No update was shared Monday regarding those plans or the current target launch date.

Barely begun

Facebook announced this summer a bold vision for a cryptocurrency that could be used by unbanked individuals worldwide.

As initially envisioned, the token’s governance will be overseen by the Libra Association, a consortium of 100 companies who will vote on technical decisions for the cryptocurrency using the Libra Investment Token, which would double as a security allowing holders to earn any interest accrued from the basket.

The stablecoin was designed to be backed by a basket of fiat currencies, later announced to be comprised of the U.S. dollar (50 percent), the euro (18 percent), the yen (14 percent), the British pound (11 percent) and the Singapore dollar (7 percent).

Financial regulators and policymakers around the world immediately announced their opposition to the project, citing fears that Libra could destabilize the global monetary order. Ministers in France and Germany said they were against Libra, India announced that Libra may not even be legal in the country and U.S. Rep. Maxine Waters (D-Calif.) called for a moratorium on the project until all regulatory questions could be cleared.

However, Calibra’s Marcus has maintained that these fears are misplaced. He testified before the U.S. Congress in July, trying to assuage the concerns of both the Senate Banking Committee and the House Financial Services Committee. (Facebook CEO Mark Zuckerberg will head to Capitol Hill next week for the same purpose.)

More recently, Marcus wrote in a letter that Libra would welcome regulatory oversight, and that the project was not looking to replace the dollar.

This has not stopped a raft of questions regarding Facebook’s intentions or Libra’s potential ramifications. Prior to their announced departures from the Libra Association, the CEOs of Visa, Mastercard and Stripe were contacted by U.S. Senators Brian Schatz (D-Hawaii) and Sherrod Brown (D-Ohio), who wrote that the companies could come under increased regulatory scrutiny should they continue their participation in the project.

Technical development

It is unclear when Libra will actually launch.

While Facebook initially targeted an early 2020 launch date, recent statements by Zuckerberg have put this timeline into doubt. However, it appears that any delay to the launch will be a result of its regulatory issues, rather than technical concerns.

Zuckerberg said during a quarterly earnings call in July that the company would take “however long” it needs to convince regulators not to interfere with Libra. In September he alluded to the possibility that the project could take years to launch.

From a technical perspective, Facebook has been secretive about what has been built so far. Since June, the team has not publicly stated what progress or drawbacks it has seen, despite open-sourcing some of Libra’s codebase.

It also remains unclear whether the team building Libra consists solely of Calibra employees, or whether individuals from other members of the association have joined in the effort.

What is known is that Facebook set up a team in Geneva, Switzerland, and previously listed blockchain-related positions in Menlo Park, California and Tel Aviv, Israel.

Mark Zuckerberg image via Aaron-Schwartz / Shutterstock