{"id":14831,"date":"2019-10-15T21:42:33","date_gmt":"2019-10-15T21:42:33","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=14831"},"modified":"2022-02-07T23:45:26","modified_gmt":"2022-02-07T23:45:26","slug":"facebook-and-libras-terrible-horrible-no-good-very-bad-week","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2019\/10\/15\/facebook-and-libras-terrible-horrible-no-good-very-bad-week\/","title":{"rendered":"Facebook and Libra’s terrible, horrible, no-good, very bad week \u2014 everybody’s left, Dave"},"content":{"rendered":"

\"\"<\/a>The Libra Association finally met in Geneva on Monday 14 October \u2014 with their remaining 21 members.<\/p>\n

The Libra board are: David Marcus from Facebook,\u00a0 Katie Haun from Andreessen Horowitz, Matthew Davie from Kiva, Wenceslao Casares from Xapo, and Patrick Ellis from PayU. Here’s the Libra press release.<\/a><\/p>\n

Bloomberg details how closely linked<\/a> all these board members are to Facebook, and to Marcus personally \u2014 though this level of interconnection is not abnormal for Silicon Valley boards.<\/p>\n

 <\/p>\n

https:\/\/twitter.com\/anguschampion\/status\/1182759064205451266<\/p>\n

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PayPal left Libra on Friday 4 October, and on Friday 11 October they were followed<\/a> by Mastercard, Visa, Stripe, Mercado Pago<\/a> and eBay. This leaves PayU as the only payments company still in the Association. Bookings.com<\/a> left on Monday 14 October.<\/p>\n

Two Senate Democrats, Sherrod Brown of Ohio and Brian Schatz of Hawaii, wrote to Visa, Mastercard and Stripe<\/a> on 8 October, saying “nice company ya got there, be a shame if Libra invited more regulator attention.”<\/p>\n

The senators’ letter directly caused some of the companies to leave. \u201cSome companies\u2019 entire business models were publicly threatened by incredibly powerful senators, who threatened to subject them to higher levels of scrutiny if they even so much as had a Libra node on one of their servers,\u201d said one person to the Financial Times.<\/a><\/p>\n

Several founding members of the Libra Association told the FT that the first months of the project had been “dogged by inertia, fractures and fear of attracting regulatory attention … Some felt that Facebook had hyped up members\u2019 involvement before they had fully committed.”<\/p>\n

According to another person who spoke to the FT,<\/a> the payment companies discussed timing, and whether to pull out together.<\/p>\n

The final straw for the companies that left on Friday 11 October was when they heard that Facebook founder Mark Zuckerberg would be testifying on Libra to the House Financial Services Committee on 23 October.<\/a><\/p>\n

US Treasurer Steve Mnuchin spoke to CNBC<\/a> (video from 8:58) on Monday 14 October. He disputed that the senators’ letters were “threatening,” calling them “clear”\u00a0\u2014 he’d met with Libra representatives, and told them that, if they don’t meet money-laundering standards, “we would take enforcement actions against them. And I think they realized that they\u2019re not ready, they\u2019re not up to par. And I assume some of the partners got concerned and dropped out until they meet those standards.\u201d<\/p>\n

Dante Disparte from Libra says there are 1500 companies interested in joining, with 180 of those being suitable prospects \u2014 including “sizable” banks. But some remaining members who spoke to the FT are still shaky, and speaking in terms of dominoes falling.<\/p>\n

Disparte admitted to the FT that Libra were unlikely to get all the regulatory approval they needed by 2020. He reiterated that Libra would not launch without regulators’ approval in the US and Europe.<\/p>\n

David Marcus assures us that all of this is actually good<\/i> news for Libra.<\/a><\/p>\n

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\n

Yup, it\u2019s \u201cnot great news in the short term\u201d. If it was a big deal when Libra launched to have MasterCard Visa PayPal onboard, then it\u2019s an equally big deal to see them go. <\/p>\n

Unless you\u2019re prepared to say that the launch press release itself was \u201cnot great news in the short term\u201d<\/p>\n

— Steve Wilson (@Steve_Lockstep) October 12, 2019<\/a><\/p><\/blockquote>\n