Sorry, Libra Association - it's not us, it's you...
When Facebook first announced Project Libra back in June, companies couldn't wait to ride the social media giant's coattails all the way to the moon - or at least to the bank - and they were willing to pony up $10 million for the privilege of being a founding member of its governing body, the Libra Association.
A few months and a few congressional hearings later, a lot of those same companies have jumped ship faster than fleas jumping off a dog before bath time.
On Tuesday, British telecom giant Vodafone announced that it was pulling out of the Libra Association. The company insists that the decision has nothing to do with regulatory concerns, stating that it decided to re-focus its energies on its own already-established digital payments service, M-Pesa.
The move makes Vodafone the eighth company to withdraw from the Libra Association since October 2019.
Libra's 7 Other Evil Exes
So which other companies felt that the risk of joining Libra outweighed the potential reward?
As the controversy surrounding Libra grew, PayPal was the first to jump ship. In early October last year, the payments processor announced that it was "forgo[ing] any further participation" in the Libra Association.
One week later, PayPal was joined by six more defectors:
- Visa
- Mastercard
- eBay
- Stripe
- Mercado Pago
Three days later, Booking Holdings announced that it, too, had left the Libra Association.
Most of the companies trotted out variations of the same polite reason for withdrawing - that they still believe in Libra and are open to the possibility of future cooperation but have decided to focus their efforts on their own business initiatives.
Of the seven, only Visa directly addressed the regulatory elephant in the room:
"We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the association’s ability to fully satisfy all requisite regulatory expectations."
In the case of Visa, Mastercard, and Stripe, the thinly veiled threats each received from Senators Sherrod Brown of Ohio and Brian Schatz of Hawaii didn't help matters any.
In a letter sent to each company, Brown and Schatz urged them to "carefully consider" how they planned to manage the risks that would inevitably be associated with membership in the Libra Association. They also cautioned:
"If you take this on, you can expect a high level of scrutiny from regulators not only on Libra-related payment activities, but on all payment activities."
Translation: If you go against us and stay with Libra, we are going to be all up in your shit.
Does Anybody Love Libra Anymore?
Sure there are. According to the Libra website, the association is currently comprised of 20 founding members:
| Member Companies | |
|---|---|
| Facebook / Calibra | Farfetch |
| Lyft | Spotify |
| Uber | Iliad |
| Anchorage | BisonTrails |
| Coinbase | Xapo |
| Andreessen Horowitz | Breakthrough Initiatives |
| Ribbit Capital | Thrive Capital |
| USV | Creative Destruction Lab |
| Kiva | Mercy Corps |
| Women's World Banking |
In fact, companies are so eager to get a piece of the Libra pie that 1500 of them have supposedly expressed interest in joining, however only 180 of them actually managed to meet the Libra Association's eligibility requirements.
Who do you think will be the next company to back out of the Libra Association? Comment below and let me know!