Members of the Libra Association, the governing body for Facebook’s proposed stablecoin, gathered at their inaugural meeting at the headquarter in Geneva, Switzerland on Monday, in order to discuss and chart a course for the forthcoming Libra coin following last week’s setback according to reports.
Ever since the whitepaper for the rumored crypto endeavor lead by the social media behemoth came out, it unleashed Pandora’s box of mounting regulatory issues for the proposed cryptocurrency. After several rumors and speculations regarding the shaking beliefs of certain members in the project, six key backers parted ways with the coalition over the weekend.
Libra lost its major global payment backers on Friday when Mastercard and Visa pulled out of the project. Now the only payments firm remaining is the Netherlands-based PayU, which unlike its former financial services fellows, does not operate in some of the biggest and prominent markets including the United States, Canada, certain areas of Africa and the Middle East.
In addition to that, fintech startup Stripe, payments company Mercado Pago and eBay also decided abandoned ship. Moreover according to reports, earlier today Booking Holdings, the owner of travel sites booking.com, priceline.com, agoda.com and Kayak, followed suit and withdrew from the Libra Association.
Thus the social media giant’s ambitious crypto endeavor faced major setbacks as the consortium, which initially comprised 28 members, spanning over several major industries, has now come down to only 21 members. Reportedly all the members would have invested the handsome amount of $10 million into the new stable coin in exchange membership and associated voting rights but even the investment couldn’t get companies to stick around for the long haul.
Agenda of the Meeting
According to Reuters, the remaining members of the Libra Association are moving ahead of the hurdles and the exodus of several key members. Dante Disparte, head of policy and communications for the Libra Association shared a rather optimistic approach in light of the recent events as he said:
It is a correction; it’s not a setback.
During the inaugural meeting the Libra Association, or what’s left of it, selected a five-member board on Monday, which included Facebook’s David Marcus as well as representatives from PayU, venture firm Andreessen Horowitz, blockchain company Xapo Holdings Limited and non-profit Kiva Microfunds.
Furthermore, members laid out a number of bylaws describing the process for electing new board members, voting on proposals, and adjudicating disputes. According to a fact sheet provided by the Libra Association during the meeting, all the members agreed upon interim articles of association laying out how the organization will be governed, as required by Swiss law.
Additionally, it was decided that most decisions would require a majority vote of the group’s governing council. However, any changes to the membership or the management of the reserve would require a two-thirds supermajority, the report explained.
Despite the series of withdrawals, the bylaws do not force the remaining member organizations in any sort of unbreakable bond. On the contrary, they specifically spelled out that any of the members from the Libra Association remains free to leave the consortium for any given reason.
However, the organization’s membership cannot be transferred under normal circumstances but that rule can be bent and the transfer may be allowed under more limited circumstances.
What’s Next for Libra?
Considering the recent news about the project, one would think that Facebook’s endeavor is on the verge of the collapsing however the optimism of the Libra Association suggests otherwise. It seems that apart from the likely push back on the Libra launch, there’s no other downside.
According to a report from Techcrunch, Libra Association announced that there are about 1,500 organizations interested in hopping aboard the project and of those, 180 have successfully met the eligibility requirements for becoming a member. It’s probably that some of these mystery organizations could replace the seven companies that dropped out of the Association.
Moreover, when the Libra Association was first introduced with its 28 members, it shared its aims to reach a hundred members ahead of a scheduled 2020 launch. This newly discovered crop of recruits could help in achieving that goal before Libra is cleared for launch by regulators, which isn’t going to be anytime soon it seems.
As of now, the Associations has not announced any changes in their strategy or any other plans to counter and convince the regulators for Libra.