Facebook will struggle to secure regulatory approval to meet Libra’s planned 2020 launch date, in the latest blow for the ailing social network’s digital currency project.
The delay follows months of warnings from politicians, officials and regulators that the project carries risks for financial stability and money laundering.
“Even though we may be ready with the technology, the regulatory piece is the bit that carries the most uncertainty,” Dante Disparte, Libra’s deputy chairman, told the FT. “We need to make sure we pursue the right licensing approvals, and that is the part that may not be ready in time.”
Facebook had intended to launch Libra by the end of next year but has been hit by the withdrawal of several companies that had signed up as founding members.
Booking.com, the online travel group, on Monday became the latest of the original 28 members of Libra to pull out – following PayPal, eBay, Stripe, Mastercard, Visa and Mercado Pago.
Our commitment is that the project will not launch until such time as it has met all the necessary regulatory approvals on both sides of the Atlantic
Dante Disparte, Libra’s deputy chairman
Mr Disparte said the scheme would not launch anywhere in the world until it had secured regulatory approval in Europe and the US.
“Our commitment is that the project will not launch until such time as it has met all the necessary regulatory approvals on both sides of the Atlantic,” he said.
Some current and former Libra members have urged Facebook to scale back the prominent role it has played in the project, suggesting that the high profile of the social media company had brought increased scrutiny and scepticism from regulators.
One member told the FT: “I can’t see this [going ahead] without Facebook putting in place a more firm separation” between itself and Libra.
Nick Read, chief executive of Vodafone, another member, said last week that Libra should have an independent chief executive as soon as possible.
The remaining 21 Libra members gathered for the first time in Geneva on Monday to elect a five-person board, including David Marcus, the Facebook executive who helped create it.
The other board members comprise Katie Haun, a former federal prosecutor and partner at Andreessen Horowitz; Matthew Davie, chief strategy officer at non-profit Kiva; Wenceslao Casares, chief executive of digital wallet provider Xapo; and Patrick Ellis, general counsel at PayU, the only payments company to remain part of the project.
Bertrand Perez, a former PayPal director who is Libra’s chief operating officer, will become chairman of the project, but will not have a vote.
Libra’s leadership was keen to emphasis on Monday that Facebook would only be one of 21 different equal members, each of whom would put in at least $10m and share equal voting rights.
Mr Disparte said: “Each member will have the same kind of power and privilege as all the others – including Facebook.”
Additional reporting by Alice Hancock