In the company’s Q3 2019 Earnings Call on July 23, 2019, Chairman and CEO of Visa, Alfred F.Kelly, revealed that no company has officially joined Facebook’s Libra project yet.
Visa is one of 27 companies that previously expressed interest in the social media giant’s new cryptocurrency initiative. Besides Visa, some of the other interested companies of the Libra project include cryptocurrency exchange Coinbase, telecommunications stalwart Vodafone, music streaming Spotify platform, and payments giant PayPal.
To that effect, a total of 27 concerned companies have signed a “non-binding letter of intent” to join Facebook’s Libra project. Stressing the need to take many factors into consideration before Visa will officially join the Libra project, Kelly said,
“It’s really, really early days and there’s just a tremendous amount to be finalized.”
Libra: Evading Regulations?
During the Earnings Call, the Chairman of Visa clarified that the company’s alliance with Facebook hinges on a number of factors, including the project’s ability to address all regulatory concerns.
On July 17, Facebook’s blockchain lead, David Marcus, appeared before the US House of Representatives to quell regulatory concerns pertaining to the Libra project. The Panel expressed skepticism over Facebook’s intention to set up the Libra headquarters in Geneva, Switzerland. However, Marcus held his ground that Facebook’s decision to set up Libra’s headquarters at Geneva was not motivated by the desire to evade regulatory and legal procedures.
Marcus clarified before the House that Libra is being designed to be used as a payment tool instead of a security. He added that Libra would behave as a stable digital coin and, as such, would not be subject to any speculation by investors. When New York Representative Alexandria Ocasio-Cortex asked the Facebook executive whether it is appropriate for a “public good” to be managed by a group of corporations, Marcus notably declined to answer.
Facebook’s whitepaper states that Libra will follow in the lines of popular cryptocurrencies such as Bitcoin (BTC) by transitioning to a decentralized public network. In order to ensure a smooth transition, however, decentralization will be achieved only over the course of the next five years.
Facebook Hires Lobbying Firms to Present Its Claim
According to a report by news outlet Politico, in an attempt to “swap policymakers scrutinizing the currency” of its Libra project, Facebook has hired the services of several lobbying associations, including the Sternhell Group and the Cypress group among others.
In light of the controversy surrounding Libra, do you think that the majority of the twenty-seven companies will withdraw support at some point in the future? Let us know your thoughts in the comments below.