Since Facebook’s June 18 simultaneous announcements of cryptocurrency Libra and digital wallet app Calibra, both planned for 2020 launch, Facebook has been slammed with skepticism and legal scrutiny from lawmakers.
David Marcus, the former head of Facebook Messenger who is now running Calibra, faced two days of grilling by members of Congress and the Senate.
Rep. Maxine Waters (D-CA) called for Facebook (FB) to halt its plans for Libra. Senators Mark Warner (D-VA) and Sherrod Brown (D-OH) echoed the same. Rep. Brad Sherman (D-CA) went so far as to say that Libra could be worse than 9/11 by financing “the next horrific terrorist attack against Americans.”
But Facebook is not the only company behind Libra.
Although politicians and business press are widely framing Libra as Facebook’s cryptocurrency—and that’s fair, since Facebook executives have led its development—the Libra Association has 28 “founding members,” including big consumer names like MasterCard, Visa, Spotify, Uber, and Lyft.
So: What do those companies say now, after two weeks of public heat on Libra?
Yahoo Finance reached out to every Libra Association founding member to ask whether their thinking about Libra, or their status as founding members, has changed. Most declined to comment. Those that did comment reiterated their commitment to the product, under the theme of financial inclusion.
That makes sense: financial inclusion, and serving the underbanked and unbanked population, is the angle Facebook has emphasized in its framing of Libra. The Libra white paper notes that “1.7 billion adults globally remain outside of the financial system with no access to a traditional bank, even though one billion have a mobile phone and nearly half a billion have internet access.” In keeping with the emphasis on financial inclusion, it’s no surprise that the most responsive founding members in our effort were nonprofits.
Mercy Corps, for example, calls all the legal scrutiny “expected and welcome.” And while PayPal did not respond to a request for comment for this story, Julian King, VP of PayPal’s remittance business Xoom, told Yahoo Finance UK this week that offering financial services to the underbanked and unbanked is a “red hot” business opportunity. “It’s about darn time that the underserved found themselves the focus of innovation around the world,” King says.
No binding agreements
Facebook said at the time of Libra’s launch announcement that all of the founding members have committed to invest $10 million in Libra. But as the New York Times has reported, none have signed binding agreements—and thus could still drop out if they decide that being linked to Libra is toxic. (The New York Times also reported that MasterCard was one of the last to commit to the Libra Association—much has been made about Visa and MasterCard being on board.)
Indeed, sources at two of the founding member companies, speaking not for attribution, tell Yahoo Finance that they are monitoring the scrutiny in D.C. closely, and they confirmed that their companies have not signed binding agreements.
Women’s World Banking: Tom Jones, COO of the nonprofit micro-lender, tells Yahoo Finance, “The hearings in D.C. reaffirmed our commitment to be part of the Libra Association and use our position to explore new ways to reach financially excluded women.”
Jones praised David Marcus’s testimony, which he says “showed his desire and commitment to resolve regulatory issues prior to launch. Although questions geared toward Facebook were understandable, Congress also demonstrated a significant concern about not wanting to stifle innovation or letting the U.S. fall behind. Though the focus during the hearings was on the U.S. marketplace, for Women’s World Banking our commitment is to the nearly 1 billion women financially excluded and the hundreds of millions more that are underserved in the emerging markets. We continue to see Libra and the Association as an opportunity to complement the other work we are doing to achieve financial inclusion for women around the world.”