When the likes of PayPal, Stripe, Visa, Master card, and the other 20-odd members of the Libra Association were approached to join Facebook on its cryptocurrency journey, they would have felt pretty well positioned.
However, things have taken a rather nasty turn for the launch of a potentially revolutionary cryptocurrency from Facebook as regulators have stepped in, and hard, to try and block the development of this new stablecoin from Facebook.
According to Bloomberg, this has caused a little bit of wavering from some of the Libra Association members who are potential rethinking their commitment as a date looms for them to sign on the dotted line, and pay up around $10 million.
Part of being a member of the Libra Association means acting as a node for the blockchain, subject to that $10 million fee. Before the regulatory push-back, $10 million would have been a drop in the ocean for these members, also relative to the potential that the deal held for them.
But, according to people familiar with the matter, Bloomberg has said:
“Executives at the payments companies [Stripe, PayPal, Visa, Mastercard] believe Facebook oversold the extent to which regulators were comfortable with the project and are concerned about the perception that the social network hasn’t behaved responsibly in other areas.”
It would be understandable for there to be a concern from these members who could potentially sign-on and totally lose out as there have been mutterings from Facebook that if they don’t get the regulatory green light, then the project could never launch.
This is not the first time the will of the Libra association members has been tested in the media. Towards the end of August, it was reported that the Libra members were still steadfast in their support of the project. And even now, with questions arising again, there have been some brief reassurances.
Stripe has said that there are no issues between themselves and Facebook on this project, adding: “Nothing has changed with our involvement with Libra since we came on to participate.”
While the balancing act continues with Facebook assuring that the 2020 launch date is still on, and the likes of France and Germany putting big barriers in the way of its development, those in the association will have to bide their time.
If Libra does launch as it is expected to do when it was announced, the pay off will be justified by the members. However, if the regulators start winning the battle, it will be a rush for the exit for these major companies.