Data Driven Futures

Facebook can win back FS support: Libra chief

Written by Hannah McGrath
17/10/2019

Facebook is optimistic that it can win the support of payments and financial firms for its Libra digital currency project once it is able to provide assurances over regulatory concerns, its head of Libra has said.

David Marcus told a panel at the International Monetary Fund (IMF) conference in Washington that he understood why a number of major payments and financial players - including Visa, PayPal, Mastercard and Stripe - had decided to exit the project in recent weeks, following mounting pressure from governments and regulators over money-laundering and data privacy concerns.

Marcus, a former president of PayPal who now leads messaging products and the Libra project for Facebook, told the panel: “It will take time for us to address all of the regulatory concerns that were raised and it’s our duty and our responsibility to come with answers to all of these questions.

“I think once we’ve done this then I think we’ll see more banks and traditional financial services firms join the effort,” he added in comments reported by Reuters news, acknowledging that the company understood the difficulties for such companies to formalise their involvement in the project “given the climate and pressure” of scepticism from regulatory bodies.

Marcus’ comments come after the Libra project - a Switzerland-based collective of tech companies tasked with overseeing the roll out of the digital currency project - confirmed earlier this week that 21 firms have signed the Libra Association charter.

The formal announcement of a governance structure and charter for the digital currency project confirmed the continued membership of tech giants Uber, Spotify and Vodafone, but revealed that major early backers Mastercard, Visa, eBay, Booking Holdings and Mercado Pago have now followed payments firms PayPal and Stripe in abandoning the project.

The social media giant received a major boost in June when it announced that it had the support of major payments and financial services players to develop the Libra virtual currency and Calibra digital wallet, enabling payments across the Facebook, WhatsApp and Instagram channels.

Marcus emphasised that the project had drawn interest from around 1,600 organisations in eventually joining the project, and insisted the association should have no problem in reaching its goal of 100 members, including financial and payments firms, for the launch of Libra, which is currently scheduled for 2020.

Lawmakers in the US have called on Facebook chief executive Mark Zuckerberg to delay the roll out of Libra until concerns over regulation and financial stability have been met.

Last week, the Bank of England also hardened its stance, warning that any digital currency has the potential to be ‘systematically significant’ and would therefore need to be subject to the same strict controls and regulatory checks as traditional payments firms.