LIBRA FORGES AHEAD: Forms Board and appoints Leadership
Twenty one members of the Libra association met for the first time on Monday this week. Libra is a global cryptocurrency that is currently under development by Facebook as well as partners and scheduled to be launched in 2020. As part of this meeting, by the association overseeing the Libra formation, they formally signed onto the Libra Association charter, formalized the Libra Association council, elected the Board of Directors, and appointed members of the Libra Association executive team.
The Libra Council appointed a board of directors that includes the following individuals: Matthew Davie (Kiva Microfunds); Patrick Ellis (PayU); Katie Haun (Andreessen Horowitz); David Marcus (Calibra, Inc.); and Wences Casares (Xapo Holdings Limited). The Libra board also officially appointed the initial association staff: Bertrand Perez, Chief Operating Officer and Interim Managing Director; Dante Disparte, Head of Policy and Communications; and Kurt Hemecker, Head of Business Development. The association elected David Marcus, a Facebook executive and co-creator of Libra, as one of the association’s five directors. According to people close to the organisation the board will soon set up a search committee to appoint a permanent chief executive.
Originally the Libra Association had 27 potential members, but several companies dropped out in recent days, including Visa, Mastercard and PayPal. Major US payment processors have exited the association. Most companies that exited have specific regulatory requirements dealing with fraud, money laundering and sanctions enforcement. Most payment processors realised they would be in trouble as governments were starting to realize that Libra might make it hard to meet those requirements.
In a letter sent to some of the companies US Senators Brown and Schatz mentioned that “Facebook appears to want the benefits of engaging in financial activities without the responsibility of being regulated as a financial services company.”
Remaining members of the Libra Association consist of venture capital firms, who are mostly aligned with Facebook’s interests, as well as nonprofits. Those companies don’t face the same pressure from regulators, as a result the level of threat is not the same.
Facebook has also faced criticism from politicians and legislators for the private currency system to allow users to make cross-border payments more easily. Mark Zuckerberg is scheduled to appear in front of the House Financial Services Committee later this month to discuss Libra.
Libra will not start trading until US legislators are satisfied and concerns addressed.
The organisation is faced with a huge task of convincing governments around the world to clear the way for Libra at a time when public trust in Facebook has never been lower. Libra is forging ahead, but the project faces a hard path moving forward and it’s only getting harder.