British telecom conglomerate Vodafone has become the eighth company to pull out of the Libra Association, the governing council for the Facebook-created global digital currency initiative, CoinDesk has learned.
Vodafone and Libra both confirmed Tuesday the company is no longer part of the consortium. Vodafone will dedicate resources previously intended for Libra to its well-established and successful digital payment service M-Pesa, which the company plans to expand beyond the six African nations currently served.
The parting appears to be amicable, with Vodafone leaving specifically to focus on its own related service and not due to the regulatory concerns that apparently spooked other former members.
Vodafone joins PayPal, Mastercard, Visa, Mercado Pago, eBay, Stripe and Booking Holdings in withdrawing from the controversial stablecoin project, and it is the first company to exit after the association was formally organized in October 2019. The payment companies likely left due to concerns about increased regulatory scrutiny, which several U.S. senators threatened. (At least one, Visa, specifically mentioned “regulatory expectations” as a reason for not joining.)
In a statement, a Vodafone spokesperson said the company believes it can most effectively bring affordable financial services to the world’s poor by focusing on M-Pesa for the moment.
“We have said from the outset that Vodafone’s desire is to make a genuine contribution to extending financial inclusion,” the spokesperson said. “We remain fully committed to that goal.”
Dante Disparte, head of policy and communication with the Libra Association, addressed Vodafone’s decision in a 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,” Disparte said.
Libra intends to admit new members to the Association in 2020, a person familiar with the situation said. The waitlist is currently north of 1,500 companies. A roughly two-thirds majority of existing members must agree to add any new participant.
Door remains open
Facebook unveiled Libra in June 2019, after months of speculation around the project. While the social media giant remains a member of its governing council through its blockchain wallet subsidiary Calibra, on paper Libra is an independent entity.
The Libra stablecoin is intended to serve as a global means of payment, and would be backed by a basket of sovereign currencies including the U.S. dollar, the euro, the British pound and others.
Libra’s goal is to “build a financial ecosystem that can plug in and empower billions of people,” Disparte told CoinDesk in June.
Marketing materials for Libra and Calibra said 1.7 billion individuals worldwide remain closed off from financial services. Libra is hoping to solve this issue by making it easier for individuals to transfer funds from person to person, a goal Vodafone shares.
The telecom has long run its own digital money in Africa through M-Pesa, a mobile platform-based transfer service.
M-Pesa already offers the ability to accept a number of different currencies for remittances. It is possible the platform will accept stablecoins, possibly including Libra, in the future, an individual familiar with Vodafone’s thinking said.
“We will continue to monitor the development of the Libra Association and do not rule out the possibility of future cooperation,” the Vodafone spokesperson said.
2020 launch?
While Libra originally intended to launch in the first half of 2020, this timeline was thrown into doubt last year when Facebook CEO Mark Zuckerberg said regulatory concerns might push back the date.
Speaking on stage at the Blockchain Central panel held by the Global Blockchain Business Council at Davos, Disparte further hinted at a possible delay in the launch schedule.
“We’d rather go slow and get it right, than assign a deadline to launch that keeps us from solving the problem of payments for those who need this solution most,” he told CoinDesk’s Joanne Po.
Regulatory certainty will, however, be needed to help “unlock” digital currencies, he said.
The launch timeline was not a concern for Vodafone, according to the person familiar with the company’s thinking.
Still, these regulatory concerns do not appear to be holding Libra back from technical design and development. The group has already launched a testnet for Libra, with new features added over the past several months.
Last week, Libra announced the formation of a technical steering committee to oversee further development of its roadmap, made up of executives from several Association members.
“The Association is continuing the work to achieve a safe, transparent, and consumer-friendly implementation of the Libra payment system,” Disparte said in his statement Tuesday.