Back in June, Facebook caused waves in and outside the cryptoeconomy in launching its Libra stablecoin. Heads turned at some of the larger partners of the 28 initially lined up for the project, which included the likes of Mastercard, Visa, and Uber.
The announcement immediately caused international regulatory backlash. The social media giant’s recent privacy debacles and its reach over billions of global users put government regulators around the world on the offensive.
In that light, Facebook won’t be launching the Libra without first navigating many regulatory thickets. In a quarterly report sent to the U.S. Securities and Exchange Commission (SEC) in July, the company admitted that it couldn’t promise Libra “will be made available in a timely manner, or at all.”
Of course, Facebook is still holding its ground for now and trying to take the steps necessary to bring the association-backed stablecoin project to fruition. But new reporting suggests the company has a new problem: some of the Libra Association’s prospective partners are reportedly considering breaking ties with the effort.
An Unhappy Trio?
In an article published on the cusp of August 23rd, the Financial Times reported that three of the Libra Association’s proposed founding members are considering whether to cut ties with the cryptocurrency project.
Why? The backlash kicked up by the Libra’s announcement has led to considerable regulatory attention and negative press. For these unhappy members, the Libra is becoming an effort that they’re doubting is worth the hassle.
“I think it’s going to be difficult for partners who want to be seen as in compliance,” one of association’s partners reportedly said.
Again, for now it’s not clear which members make up this discontented trio. It could be some of the body’s largest members, who by their sheer size have enough at stake as it is. Or it could be some of the association’s smaller partners, who perhaps aren’t sure if they can keep up with a firestorm for the foreseeable future.
Notably, Visa chief executive officer Alfred Kelly Jr. said last month during a company earnings call that the Libra Association’s inaugural prospects had only committed to non-binding agreements by that point. If that is still the case, then the discontented would-be partners can seemingly walk away at any time.
Even If Some Go, Others Most Definitely Want In
The Libra project may not ending up being a fit for some of its earliest supposed backers. But that doesn’t mean that other companies and groups aren’t angling to get their feet in the Libra Association’s doors.
The cost of admission? $10 million USD per Libra validator node. The potential payoff? Major clout and influence if the Libra proves to be even half as successful as its creators envision it can be.
“For every backer reconsidering their association with Libra, there are literally hundreds of reputable institutions (maybe more) willing to take their place,” DTC Capital founder Spencer Noon suggested on Twitter.
Indeed, the cryptoeconomy itself has already seen several of its own stalwarts flirt with the possibility of joining the Libra Association. Just in the past few weeks, we’ve seen major cryptocurrency exchanges like Binance and Coincheck signal interest in becoming members. Gemini owners Tyler and Cameron Winklevoss have said they are open to the idea, too.
Stakeholders in the Ethereum community have even floated the idea of organizing a group to represent Ethereum’s interests within the association.
Who goes in and who goes out remains to be seen. Whatever happens, it’s clear that Facebook is facing pressure on many fronts. This week, Binance revealed it was planning on launching its own version of Libra dubbed “Venus.”
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