Despite having high-profile defections in the past week, Facebook’s Libra Association proceeded with its inaugural members meeting. The meeting, held in Geneva on Monday, produced two important developments. First, the Libra Association’s 21 members formally committed to helping Facebook (FB) create its global digital currency, Libra. Second, the association set up a board of directors to help steer operations. Facebook’s Libra cryptocurrency project has run into headwinds, with resistance from regulators and politicians around the world.
Facebook’s Libra project hit by membership defection
As if to add insult to injury, the Libra project has lost support from some of its most important founders. PayPal, Visa, Mastercard, eBay, Stripe, Booking, and Mercado Pago have withdrawn their support. However, despite this setback, we still see a light at the end of the tunnel for Libra.
Only a fraction of original Libra backers is out
Facebook unveiled Libra in June with 28 inaugural members. Only seven members of the original group have withdrawn their support for Libra, meaning it still has the support of most founding members. The big corporate names still backing Libra include Vodafone (VOD), the world’s second-largest mobile operator, and Spotify (SPOT), the world’s leading music streaming company. There are also ride-hailing leaders Uber Technologies (UBER) and Lyft (LYFT).
1,500 entities want to join Facebook’s Libra
While only seven Libra founding members have left, the list waiting to replace them is long. Some 1,500 entities have shown interest in becoming part of Facebook’s Libra project, showing there’s no shortage of support for Libra.
Defecting members signal they may return at some point
Libra Association board member and lead representative David Marcus has asserted people shouldn’t think Libra is dead just because a few members have pulled out. Many of the founding Libra members that defected appear to still believe in Libra. In fact, some have signaled they wouldn’t mind returning once its challenges have been resolved.
After it pulled out of the Libra project, Stripe said it would “remain open to working with the Libra Association at a later stage.” After Visa withdrew, it said, “Visa’s continued interest in Libra stems from our belief that well-regulated blockchain-based networks could extend the value of secure digital payments to a greater number of people and places, particularly in emerging and developing markets.” And after exiting Libra, PayPal said, “We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future.”