The Libra Association has held its first meeting with the 21 remaining members More than 1,500 companies have expressed their desire to join but only 180 are eligible

Since last year, Facebook is going through difficult times. Indeed, the social network is accused of not having done enough to protect the personal data of the users and to have allowed the false news and the information to invade its platform. Beyond sharing user data with third-party companies, Facebook was also attacked in 2018 as the hacking of tens of millions of accounts, angering users and rights organizations on the Internet. However, this situation has not prevented the platform from continuing to project itself into the future. After the development of several services and products, Facebook became interested in cryptocurrency. The goal is to enable the sending of money online via instant messaging applications (Messenger, WhatsApp and Instagram) that may soon be unified to provide an iMessage experience. With its billions of users, the calculation was quickly done: an opportunity of 19 billion additional dollars for Facebook by 2021 if his plans work well. The payments could then help Facebook develop a whole new source of revenue outside of the advertising, something the company is in great need of at this point in its history.

Calibra, the digital wallet to manage Libra, will be operational in 2020It was not until mid-June that Libra was officially launched. Libra must offer from the first half of 2020 a new means of payment outside the traditional banking circuits: it is the cornerstone of a brand new financial ecosystem without the barrier of different currencies. Project leaders explained that users will have a digital wallet on their smartphone to shop, send or receive money. this effect, like Alphabet, Facebook has decided to open a new subsidiary that will focus on providing the various financial services around Libra. Moreover, this subsidiary gave its name to the digital wallet: Calibra.

Today we share the plans of Calibra, a new subsidiary of Facebook whose goal is to provide financial services that will allow people to access the Libra network and participate in its activities. The first product that Calibra will introduce is a digital wallet for Libra, a new global currency based on blockchain technology. The portfolio will be available in Messenger, WhatsApp and as a standalone application – and we plan to launch it in 2020.

From the beginning, with Calibra, you will be able to send Libra almost everyone with a smartphone, as easily and instantaneously as you could send a text message at no cost. And, over time, we hope to offer additional services to individuals and businesses, such as paying bills at the touch of a button, buying a cup of coffee with the code of a scanner, or using public transit without having to carry cash or a transport card.

Here is an overview of the use of Calibra:

Leaders who do not hide their concern

After the announcement of Facebook, France has announced its intention to ensure that the international community sets a framework so that the future Facebook cryptocurrency remains only a transaction instrument without becoming a sovereign currency through the Minister of Finance.

What Facebook creates a transaction instrument, why not. However, that has become a sovereign currency, there can be no question, said Bruno Mayor on Europe 1. To avoid such an outcome, we will ask for guarantees, especially to ensure that this instrument of transaction can not be for example, for financing terrorism (…) for the financing of illegal activities, he added.

Only two days after the official presentation in mid-June, the Senate Committee on Digital Sovereignty seized Libra, as this cryptocurrency could upset the conditions for exercising state sovereignty well beyond the monetary domain.A few days later, it was the turn of the Bank of France to go up to the crenches, through its governor Franois Villeroy de Galhau, to remind the newcomer of the rules of the game: If the project's ambition is vast, it does not matter. can exist only by respecting the rules that are valid for all.

At the beginning of July, members of parliament asked Facebook to cease immediately its implementation plans because of serious concerns about private life, trade, national security and monetary policy.

The same month, Congressional Democrats studied a new bill that would put an end to Facebook's ambitions in the world of cryptocurrencies. The new bill, called the Keep Big Tech Out of Finance Act, would explicitly prohibit large Internet companies from operating as banking institutions or issuing digital currencies. This proposed law would directly target the firm of Menlo Park and its project Libra.

In September, Bruno Mayor said: Libra also raises a systemic risk from the moment there are two billion consumers. Any shortcomings in the functioning of this currency in the management of its reserves could create considerable financial disruption. For the Minister of Economy and Finance, the grievances are many: risks of abuse of position and sovereignty, both for consumers and businesses. All these concerns about Libra are serious, so I want to say with a lot of clarity (that) in these conditions we can not authorize the development of Libra on the European soil.

A standard pressure that causes departures

The effects of the pressure were first felt at the end of September through Bertrand Perez, the director general of the Libra association. Indeed, while the launch date was planned for June 2020, it indicated that it could slide smoothly for one or two quarters, the time to interact with agencies. It is important to comply with the (requirements) of the supervisory bodies (…) We knew that we would have to answer many questions from the regulators on both sides of the Atlantic and other parts of the world, he explained.

But a shift took place when Paypal, the US payment processing company, decided to withdraw from the list of companies that supported this project.

This withdrawal of Paypal has made the company the first member to leave Facebook's Libra association. The company has not given any particular reasons for its withdrawal from this project. But in some media, Paypal had already begun to distance itself from the project because of some regulatory issues that the company had concerns about. In particular, the way in which the platform will fight against money laundering, and the request it received from the US Treasury on this subject, probably precipitated its decision.

However, Paypal has announced that Facebook remains a strategic partner and that it will continue to support various securities. In response to this, Dante Disparte, the Libra Association's Policy and Communications Officer, simply stated that the association was aware of the challenges that lie ahead in its plan to reconfigure the financial system: The journey will be long and difficult. The type of change that will reconfigure the financial system according to the people, not the institutions that serve them, will be difficult. Engagement in this mission is more important to us than anything else. It is better to know this lack of commitment now rather than later.

Others have followed Paypal, including MasterCard, Visa, eBay, Stripe, Mercado Pago and finally Booking. That's a quarter of all initial members (7 out of 28). The Libra Association now has 21 members: Anchorage, Mercy Corps, Andreessen Horowitz, PayU, Bison Trails, Ribbit Capital, Breakthrough Initiatives, Spotify, Calibra, Thrive Capital, Coinbase, Uber, Creative Destruction Lab, Union Square Ventures, Farfetch UK, Vodafone, Iliad, Women's World Banking, Kiva Microfunds, Xapo Holdings and Lyft.

It should be noted that a letter was sent by the officers Brian Schatz and Sherrod Brown Stripe, Visa and MasterCard to warn them about the Libra project. You should be worried that any weakness in Facebook's risk management system will become a weakness in your own systems and that you may not be able to mitigate it effectively, say the two senators. The missive is dated October 8, the defections were officially announced on the 11th.

Brian Armstrong, boss and co-founder of Coinbase (which is among the remaining 21 members of Libra), did not appreciate this letter, voicing a very anti-American stance: No matter what you think of Libra. If it's not a useful tool or innovation, people will not use it. Why go through the tactics of bullying? It would be called anti-competitive / monopolistic behavior if a private company did.

A first meeting in a tense climate

It is in this context that the first meeting of the members of the association was held on Monday, as well as the first meeting of the board of directors of Libra which includes five people read: Matthew Davie (Kiva Microfunds), Patrick Ellis (PayU ), Katie Haun (Andreessen Horowitz), David Marcus (Calibra / Facebook) and Wences Casares (Xapo Holdings Limited). Bertrand Perez (formerly of PayPal and General Manager of Libra since June 2019) has been appointed General Secretary of the Board of Members and the Board of Directors. He is second by Dante Disparte in both cases.

Represented by Patrick Ellis, PayU is the only conventional payment company remaining in the Libra Association after the departure of more well-known payment providers such as Visa and Mastercard. Libra will have to interact with the traditional financial system, which will be much easier with the active help of conventional financial companies. Conventional payment companies are dependent on financial regulators. They therefore have a particular reason to avoid participating in a project that might endanger political decision-makers.

Officially, Facebook, through its subsidiary cryptocurrency Calibra, is only one of 21 members of the association, each with the same right to vote. Facebook said it expects to expand the organization's membership to more than 100 organizations by the time Libra is launched in 2020.

In France, Iliad is Libra's only partner company for this launch. Faced with the refusal of regulators, Xavier Niel has estimated that Libra will exist as the other 1,600 other virtual currencies already available in France, it is inevitable, with or without us, the states want it or not.

And to point out that Libra is simply a pro-currency, that is, a currency that is based on already existing currencies in proportion to their use in world trade. This system is structurally more stable, a safe haven in many countries in case of monetary instability. If he recognizes that the concerns are legitimate, it must be answered without attempting to forbid it, without even measuring the benefits for all. Prudence does not mean distrust.

Finally, he asserts that Libra is a reliable project, constructive, demanding and consistent with the interests of our country. This is not the currency of Facebook, but the currency of actors who have gathered around a big idea.

On Monday, the Libra association said 1,500 organizations had shown interest in joining. The group claims that about 180 of these companies meet the membership criteria of the Libra Association. These criteria vary according to the type of organization, but they include market capitalization (for companies), the amount of financial debit (for financial institutions) and the annual budget (for non-profit organizations).

The members should each contribute $ 10 million to support the development of Libra. It is unclear if organizations contributed to Monday's meeting or if it will happen later.

Sources: Libra, Brian Armstrong

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