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February 21, 2020
After losing several high profile members ahead of its official launch, the Libra Association has finally gained one major supporter: the e-commerce giant Shopify.
Though it's still unclear what the current vision for Libra is, Shopify said its membership is part of its commitment to building "a payment network that makes money easier to access and supports merchants and consumers everywhere" and "advocating for transparent fees and easy access to capital," in a Friday morning blog post.
Shopify has one million merchants across 175 countries and has processed $155 billion in sales. It currently supports other cryptocurrencies through Coinbase Commerce, BitPay, GoCoin, and CoinPayments, though there "isn't any demand to use it by buyers right now," Shopify CEO Tobi Lutke tweeted Friday. Lutke said he'd be keen to work on enabling payments with bitcoin if demand for bitcoin payments grows.
Libra, the digital currency initially introduced by Facebook in June, has been met with hostility from global regulators who aren't open to a new corporate-issued private currency that will compete with government-issued currency. Even before Facebook announced Libra, the social media giant was already facing pushback from lawmakers over its handling of consumer data and privacy. Facebook CEO Mark Zuckerberg and head of Calibra (Facebook's digital wallet) David Marcus have repeatedly assured critics the project would not move forward until U.S. regulators' concerns are satisfied. But as a result, the idea of Libra has morphed and its development has seemingly come to a halt.
Libra was initially introduced as a stablecoin that would be backed by a basket of fiat currencies but is now considering a U.S. dollar-backing instead, according to a report last week by The Block.
The Libra Association, the Switzerland-based governing council for the project, launched in October, four months after Facebook first introduced the idea of Libra and the Libra Association, which is meant to decentralize the leadership of the project. Facebook's Calibra is part of the alliance, though Facebook itself is not. Nevertheless, many Washington lawmakers have been skeptical of the Association from the beginning.
"Facebook has portrayed the Libra Association as a collective as if Facebook is just one of many voices in this venture," said Rep. Jesús García (D-Ill.) said after Libra was announced last summer. "Facebook's voice is more like the godfather's voice in the family. It's true that it's just one voice among many, but it's also the only voice that matters."
More than half of the Libra Association members employ former Facebook executives, have boards that include Facebook board members, and/or have multiple ties to Facebook through common investors.
Likewise, in September Shopify hired Kaz Nejatian, who was previously Facebook's lead product manager on payment platforms across Facebook owned-apps. He's now vice president and general manager of Shopify financial solutions.
Shopify's membership in the association, which requires a minimum $10 million investment, lets it operate as a validator node, one of the members that decide which transactions get added to the Libra blockchain and allows it one vote on the Libra Association council. It can also earn dividends from interest earned on the Libra reserve.
Payments giants Visa, Mastercard, and Stripe were the first to defect from the association before it officially launched. They were followed soon after by PayPal, eBay, Booking Holdings, Mercado Pago, and Vodafone.
"We like to make decisions based on future potential instead of heard (sic) movement," Lutke said in another tweet Friday. "Funnily enough this usually leads to us doing the opposite of the others."
Other current members of the Association include Coinbase, Xapo, Anchorage, Bison Trails, Andreessen Horowitz, Thrive Capital, Ribbit Capital, Union Square Ventures, Uber, Lyft, Kiva, Mercy Corps, Women's World Banking, Spotify, PayU, and Mark Zuckerberg's Breakthrough Initiatives.