Earlier this month, it seemed like it was curtains closed for Libra, Facebook’s cryptocurrency project.
Over the course of one week, some of the largest firms in the Libra Association decided to renege on their promises. It started with PayPal, who missed a meeting with its partners, then followed Mastercard, Stripe, eBay, Booking Holdings, and Mercado Pago. But arguably most notably, payment processing giant Visa decided to bow out of Facebook’s cryptocurrency project. Unsurprisingly, regulatory concerns were cited by most of these firms.
The loss of these companies led many to state that the project was “dead” and would soon become nothing but a footnote on Facebook’s Wikipedia page.
But Alfred F. Kelly, the chief executive of the San Francisco-headquartered Visa, revealed in a recent interview that he is still open to joining hands with Facebook for the purpose of bolstering Libra. Whether or not this convinced the Libra skeptics that the project is alive and well remains to be seen though.
Visa and Libra Still a Possibility
Speaking to Spanish publication Economico Valor (Economic Value) in a recent interview, Kelly asserted that he is still maintaining a communications channel with Facebook regarding cryptocurrency, as his company sees the value of this technology and its ability to benefit those that don’t have access to banking services. Underscoring Visa’s vision, the CEO stated,
“As a curious and open company — and given the leadership we have in the payments ecosystem — we want to engage in everything in the payment space until we reach a point where we believe our engagement is no longer positive.”
Indeed, as Visa’s website reads, “We are a global payments technology company working to enable consumers, businesses, banks and governments to use digital currency.” Libra, if implemented as its creators envision it, will help Visa accomplish just that.
As Facebook chief Mark Zuckerberg explained in recent testimony, there is a need for new financial infrastructure, citing the simple fact that the exists “more than a billion people around the world who don’t have access to a bank account.”
He elaborated that being excluded from the financial system has “real consequences,” looking to the high cost and long wait times that are associated with cash remittances. As the Facebook chief put it simply, “the current system is failing the disadvantaged; the financial industry is stagnant.”
Libra is expected to tackle these problems head-on.
Visa Rejoining Not Likely Anytime Soon
While Kelly is seeming open to joining the Libra Association officially, it is unlikely to happen anytime soon. He said in that same interview that Libra, due to its inherently disruptive nature, will inherently be controversial with regulators. Butting heads with regulators, of course, is something that Visa is likely looking to avoid.
The thing is, the fear of Libra from politicians is only getting worse. According to Reuters, those involved in a recent G20 meeting, including finance chiefs from the world’s largest nations, asserted that stablecoins, while potentially beneficial to financial inclusion and such, pose risks related to “money laundering, illicit finance, and consumer and investor protection.”
Thus, the G20 is purportedly looking to move to ensure that Libra doesn’t launch before everything is ironed out. As Bank of Japan Governor Haruhiko Kuroda said:
“Policymakers have expressed concerns over various risks stablecoins pose. Until they are addressed, stablecoins should not be issued. That was something agreed by the G20 members.”