Despite defections, Facebook officially launches Libra

Silhouettes are seen beneath a sign of Libra, the cryptocurrency project launched by Facebook during a conference at marketing and communication school CREA in Geneva on September 26, 2019. (AFP)

NEW YORK  — Facebook officially moved forward with its plans Monday to create a new digital currency called Libra, despite several high-profile defections from the project and intense criticism from U.S. regulators and politicians.

The Libra Association, the nonprofit that will govern the currency, officially signed on 21 charter members on Monday at the organization’s inaugural meeting in Geneva. Originally the Libra Association had 27 potential members, but several companies dropped out in recent days, including Visa, Mastercard and PayPal.

Most of the remaining members of the Libra Association consist of venture capital firms and nonprofits. Some larger companies who are now members of the association include Uber, Lyft, Spotify and European telecommunications company Vodafone.

Facebook has faced criticism since the summer when it unveiled plans to create a separate, private currency system to allow users to make cross-border payments more easily. Politicians have said they believe Facebook’s struggles with protecting users’ privacy would spill over into Libra, despite it being a separate organization.

The Menlo Park, California-based company tried to answer those criticisms by creating Libra as a legally separate entity through the Libra Association, and by not owning Libra itself. But Facebook is still involved, even at an arm’s length. The association elected David Marcus, a Facebook executive and co-creator of Libra, as one of the association’s five directors.

Facebook CEO Mark Zuckerberg is scheduled to appear in front of the House Financial Services Committee later this month to discuss Libra. That committee is chaired by Rep. Maxine Waters, D-Calif., who has been an ardent critic of Libra from its onset.

The other four directors elected to the association’s board were Matthew Davie of Kiva Microfunds, Patrick Ellis with PayU, Katie Haun with Andreessen Horowitz, and Wences Casares of Xapo Holdings Ltd.