Vodafone, a major British telecom, just became the eighth mega company to pull out of the Libra Association, the independent governing council for Facebook’s global cryptocurrency project.
Both Vodafone and the Libra Association confirmed the news to Modern Consensus via email. Dante Disparte, who is the head of policy and communications for the Libra Association, issued the following statement:
“Although the makeup of the Association members may change over time, the design of Libra’s governance and technology ensures the Libra payment system will remain resilient. The Association is continuing the work to achieve a safe, transparent, and consumer-friendly implementation of the Libra payment system.”
Vodafone follows PayPal, Mastercard, Visa, Mercado Pago, eBay, Stripe, and Booking Holdings in abandoning the troubled stablecoin project, and it is the first to depart after the Libra Association was formally organized in October 2019.
The move brings the number of original corporate backers, who were meant to help govern the project, down from 28 to 20. The founding members were also expected to invest a minimum of $10 million to fund the operating costs of the association and launch an incentive program to drive adoption, according to Facebook’s initial announcement of the project.
While the payment companies likely quit due to regulatory scrutiny on the Libra project, Vodafone said it had other motivations. The conglomerate told CoinDesk, who first reported the news, that it simply wants to switch gears and put the resources it originally intended for Libra into bringing financial services to the world’s poor by focusing on its African mobile money transfer service M-Pesa. (Pesa is a Swahili word for money.)
“We have said from the outset that Vodafone’s desire is to make a genuine contribution to extending financial inclusion. We remain fully committed to that goal and feel that we can make the most contribution by focusing our efforts on M-Pesa. We will continue to monitor the development of the Libra Association and do not rule out the possibility of future co-operation,” a spokesperson for the company told Modern Consensus.
Vodafone launched the hugely successful M-Pesa in 2007 for Safaricom and Vodacom, the largest mobile network operators in Kenya and Tanzania. Now it plans to expand the peer-to-peer service beyond the six African countries in which it’s now available.
Rocky road ahead
Facebook formally announced Libra on June 18, 2019. The Libra stablecoin, which would be backed by a basket of sovereign currencies, was intended as a global currency that would bring financial inclusion to the world’s poor.
Soon after it launched, however, Libra found itself adrift in the troubled waters of regulatory uncertainty. Regulators and politicians in the U.S. and Europe have expressed serious concerns about the project, most of those related to loopholes for money laundering and funding of terrorist activities and Facebook’s terrible track record on user data privacy.
Libra was originally slated for launch in mid-2020, but whether or not that actually happens or if it does launch in the format Facebook originally intended, remains to be seen.
(Updated with a quote from Vodafone.)