Vodafone is the Latest Company to Leave the Libra Association
- The British telecoms giant is the first company to leave the controversial project since it held its inaugural meeting in October.
- Vodafone has decided to focus its attention on its own digital payment service, the M-Pesa mobile platform-based transfer service.
Vodafone service centre. The Music Network
Vodafone has become the first company to exit the Libra Association after it was formally formed last year, the Financial Times reported on 21 January.
According to the report, Vodafone and Libra both confirmed that the company is no longer a part of the consortium. It also appears that the parting was amicable, with the telecom conglomerate departing the project in order to focus on its own digital payment service, and not because of regulatory pressure.
A Vodafone representative reportedly said:
“Vodafone Group has decided to withdraw from the Libra Association. We have said from the outset that Vodafone’s desire is to make a genuine contribution to extending financial inclusion. We remain fully committed to that goal and feel that we can make the most contribution by focusing our efforts on M-Pesa.”
M-Pesa is a mobile platform-based transfer service, which Vodafone has used to run its own digital money in Africa. The platform already offers the ability to accept different currencies for remittances, and is likely that it will start accepting stablecoins in the future.
The Vodafone representative further stated:
“We will continue to monitor the development of the Libra Association and do not rule out the possibility of future co-operation.”
Vodafone became the eight member to withdraw from the controversial stablecoin project, joining the ranks of companies such a PayPal, Mastercard, Visa, Mercado Pago, eBay, Stripe and Booking Holdings. Even though the payment companies likely left due to regulatory pressure, all aforementioned firms left the association before it held its inaugural meeting back in October.
Vodafone’s sudden departure will not stop the project. The Libra Association intends to admit new members into its ranks in 2020, with it being in the process of assessing hundreds of applications from other non-profits and businesses to join the project.
Dante Disparte, Libra’s Head of Policy and Communications, said:
“Although the make-up of the asssociation members may change over time, the design of Libra’s governance and technology ensures the Libra payment system will remain resilient.”
Last week, the association formed a Technical Steering Committee which would oversee the development of its roadmap, and coordinate the design of the Libra platform. The committee consists of five members from various firms in the fintech and blockchain industries.
- The Diem Association has withdrawn its application for a payment system license in Switzerland, and will now register as a money services business with FinCEN.
- The association has also partnered with crypto friendly bank Silvergate, which will issue the Diem USD stablecoin and manage its reserves.
David Marcus, Head, Diem, Facebook, speaking at the Creating a Credible and Trusted Digital Currency session at the World Economic Forum Annual Meeting 2020 in Davos-Klosters, Switzerland, 23 January. World Economic Forum/Faruk Pinjo
- While there was no confirmed date for the launch of the pilot, sources have said it will involve a single stablecoin tied to the U.S. dollar.
- The pilot is expected to be a small-scale one, mainly focusing on payments between individual consumers.
- The rebranding could be connected to the recent reports that claim the Diem Association was aiming for a 2021 stablecoin launch.
- Meaning “day” in Latin, the new name is supposed to show that the project has significantly changed its mission.