Officials at Visa, Mastercard, PayPal, and Stripe are reportedly hesitating now about officially signing on as members of the Libra Association, a governance consortium assembled by Facebook to advise on its proposed private, in-app currency system, Libra.
The 28 current members of the Libra Association are reportedly being asked to make their affiliation official later this month. Membership thus far has involved only the signing of non-binding letters.
In response to Wall Street Journal coverage about cold feet at the Libra Association, Libra lead David Marcus tweeted October 1st that, “official 1st wave of Libra Association members will be formalized in the weeks to come…”
When Facebook announced Libra in June, the company was immediately slammed by denouncements from regulators around the globe, who warn the system could not only undermine global anti-money laundering efforts, but could also cause the collapse of small currencies and undermine management of local and global monetary systems.
According to Bloomberg, Visa, Mastercard, PayPal and Stripe leaders are concerned a formal relationship with Libra might bring heat.
They also fear their own working relationship with regulators could be harmed by the association.
Facebook may have also been overly sanguine about Libra’s prospects when pitching it to the companies, says Bloomberg, citing claims from unnamed sources:
“Executives at the payments companies believe Facebook oversold the extent to which regulators were comfortable with the project and are concerned about the perception the social network hasn’t behaved responsibly in other areas — such as how it has handled user data and privacy…”
Companies that join the Libra Association are being asked to invest $10 million USD in Libra.
So far, Libra is conceived as a stablecoin cryptocurrency managed on a blockchain and backed by a basket of real-world currencies and bonds denominated about 50% by USD.
Three sources to Bloomberg say Libra Association reps will meet in Switzerland on October 14th to sign the Association’s charter.
A spokesperson for Stripe says the company’s relationship to the Libra Association has not changed:
“Nothing has changed with our involvement with Libra since we came on to participate…We agreed to work on the charter with these other participants. We continue to work on the charter. We’re still actively involved.”
PayPal has been contacted regarding these reports and any comments will be appended here.