Libra Association Holds Inaugural Meeting, Forms Governing Council

The Libra Association’s charter was signed by 21 organizations only days after several high profile companies left the consortium, Reuters reported on 14 October.

According to the report, the organization not only named its five member board of directors, but also agreed on an interim articles of association, which describe how it will be governed.

With this move the Libra Association reaffirmed its interest in creating a payment-oriented stablecoin, which will be backed by a basket of fiat currencies.

A two-thirds majority will be required to make changes to membership or management of the reserve, while major decisions will reportedly require a majority vote from the ruling council.

The five person board consists of:

• David Marcus, Calibra’s CEO
• Katie Hun, general partner at Andreessen Horowitz
• Patrick Ellis, general counsel at PayU
• Matthew Davie, chief strategy officer of Kiva
• Wences Cesares, CEO of Xapo

According to a press release from the Libra Association, its charter was signed by Coinbase, Xapo, Anchorage, Bison Trails, Creative Destruction Lab, Lyft, Kiva, Mercy Corps, Women’s World Banking, Spotify, PayU, Andreessen Horowitz, Thrive Capital, Ribbit Capital, Union Square Ventures, Breakthrough Initiatives, Illiad, Vodafone, Farfetch and Uber.

When first announced, the Libra Association consisted of 28 major firms, but due to concerns over regulatory backlash, that number has gone down to 21 in the past week.

The first to leave the association was PayPal on 4 October, with Visa, Mastercard, eBay, Stripe, and Mercado Pago following a week after. With the withdrawal of these companies, the only payment firm that remained in the association is PayU, which reportedly does not operate in the U.S., Canada, and some parts in Africa and the Middle East.

The latest company to abandon the project was Booking Holdings, the owner of travel sites booking.com, priceline.com, agoda.com and Kayak.

Even though Facebook originally targeted an early 2020 launch of the project, the recent backlash it has seen from regulators will most likely make that impossible. Some investors have now even started betting on whether the project will be launched in 2020, or later.

As we heard in July, David Marcus stated that the Libra stablecoin will not be launched until all regulatory concerns were addressed. Earlier this week the Financial Stability Board’s chair, Randal Quarles, said that even if Facebook addresses all the regulatory concerns, it might necessarily mean that they will receive regulatory approval for a stablecoin arrangement.

In an attempt to defend the project, Facebook’s CEO Mark Zuckerberg will attend a congressional hearing before the U.S. House of Representatives Financial Services Committee later this month.

During the hearing, called “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors”, Zuckerberg will be the only witness.