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Facebook's Libra lacks solid plan for launch- governing board member

Published 12/19/2019, 08:47 AM
© Reuters. FILE PHOTO: Libra logo in illustration picture
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By Tom Wilson

LONDON (Reuters) - Facebook's (O:FB) Libra project has no solid plan yet for how or where it will be launched next year, a member of the board that will oversee the cryptocurrency told Reuters on Thursday.

The scope of Libra's introduction, due by the end of June, depends on talks with regulators, said Patrick Ellis, one of five board members of the Geneva-based Libra Association that will issue and govern the digital currency.

"At this stage, there is no strategy set in stone for the markets or the product, or how it will actually get rolled out," Ellis said in a telephone interview from Singapore.

The prospect of Libra gaining traction among Facebook's nearly 2.4 billion users has raised concerns among regulators around the world, who are nervous that it could radically alter the global financial landscape.

Officials running the project, including co-creator David Marcus of Facebook, have said regulatory hurdles could see the launch delayed beyond the planned June launch date.

Asked if the cryptocurrency would launch in 2020, Ellis said: "Yes. Yes, it'll launch."

Regulators have expressed concerns about Libra's potential to erode countries' control over their monetary policy and upset financial stability across the world.

U.S. Federal Reserve Governor Lael Brainard launched the latest broadside against the project on Wednesday, saying it faced a "core set of legal and regulatory challenges" and that its "stablecoin" concept remained unproven.

Libra will be backed by a reserve of assets such as bank deposits and government debt, held by a network of custodians. The structure is meant to foster trust and avoid the price swings that plague other cryptocurrencies.

Brainard's remarks highlight the challenges facing Libra.

"It's just too early to put a solid strategy in place," Ellis said. "We have still got so much to solve with the regulators in order to be able to then refine the strategy for launch."

Talks between Libra and regulators in Europe, the United States and southeast Asia were progressing, Ellis said. He declined to give details on the steps Libra is taking to respond to the regulators' worries.

Some of Facebook's original backers, including Mastercard (NYSE:MA) and Visa (NYSE:V), ditched the project in October.

Netherlands-based PayU, of which Ellis is general counsel, is the only remaining international payments firm among the association's 21 members.

All members have to contribute a minimum of $10 million to be part of the Libra network.

© Reuters. FILE PHOTO: Libra logo in illustration picture

Apart from Facebook, none have currently contributed any money to the project, Ellis said. Contributions are on track to begin in the first or second quarter next year, he said.

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