Libra could use a return to balance. Even by Facebook standards, it’s been a tumultuous few weeks for the company’s nascent cryptocurrency effort. First came the departure of PayPal, the old haunt of Facebook blockchain guru David Marcus, from the Libra Association, the group that plans to administer the cryptocurrency. Then came six other defections, including Visa and Mastercard—and, Monday morning, Priceline owner Bookings Holdings. Adding salt to the wound, Facebook’s new fintech subsidiary, Calibra, was slapped with a lawsuit last week over its logo, which bears a suspicious resemblance to another fintech’s look.
On Monday, the remaining members of the Libra Association held their first meeting in Geneva. If they were in search of clarity, they appeared to gain little.
The association said it had agreed on an “interim” articles of association. The document is light on details, apart from the basic mechanics of how the group will operate, like the board structure and how voting will work. It named five people to the association board, including Marcus and Andreessen Horowitz general partner Katie Haun, who will help steer the ship from here. The board notably lacks any true competitor to Facebook in either social media or finance. After the recent departures, the association had just one payments company to draw from: PayU, the Naspers-owned firm that primarily operates in developing nations.
In a statement, the association said it would “begin the important process” of setting up governance and policy structures. In other words, the hard stuff. From the moment Libra was announced in June, regulators have been demanding to know how the network will be policed and what role it will play in global finance. In the interim, the document notes that “any member may leave the association for any reason.” The seven who departed did not wait for the association’s blessing.
The document does not mention whether the members had committed to investing $10 million to fund the association, as initially planned. The Libra Association did not respond to questions about the payments or when a final charter could be expected.
In recent days, officials in Washington rushed to take credit for peeling off Libra Association members. The defectors are primarily payments companies whose inclusion had initially been seen as a coup for Facebook, due to their expertise and vast scale across networks of vendors. Mastercard, Visa, and Stripe reportedly balked after receiving letters from Senator Brian Schatz (D-Hawaii) and Senator Sherrod Brown (D-Ohio). But on Monday, Treasury Secretary Steven Mnuchin made sure to emphasize his department’s role in dissuading those companies from participating. “I wouldn’t give [the senators] too much credit because at Treasury we wrote letters as well,” adding that he also reminded the companies in meetings that they would receive intense scrutiny.
Marcus alluded to that pressure in a series of tweets on Friday, when he thanked Visa and Mastercard for “sticking it out until the 11th hour.” Facebook CEO Mark Zuckerberg is scheduled to answer questions about Libra before the House Financial Services Committee on October 23.
The remaining 21 members appeared to be holding their ground, at least for now. “Though it is still in the early stages, we look forward to exploring the opportunity offered by the Libra Association to empower billions of people globally,” Spotify said in a statement.
Now the association is tasked with rebuilding, though it may be hard pressed to find new financial members with the same global reach of its erstwhile partners. The Libra Association said in a statement that Libra had “generated excitement around the world” and that 1,500 entities had expressed interest in joining. It said 180 had met the preliminary membership criteria, which includes guidelines for things like market size and number of customers. Facebook initially said it wanted 100 members by the time by Libra launches.