So it’s with some trepidation that we approach Facebook’s latest launch of a bitcoin called Libra. The Facebook PR tells us that Libra is designed to maintain a stable value due to backing by a bucket of international currencies. The Libra is also designed for use anywhere in the world instantly, while charging itty-bitty fees.
Sounds good, yes? So what are we to make of seven of the original ruling Libra Council members abandoning ship before the hull even hits the water? The news of the sailors abandoning the Libra ship broke during Libra’s first council meeting in mid-October at Geneva, Switzerland.
We’ll Eat No Hardtack and Risk No Scurvy
These founding members are tasked with sailing the Libra ship through the choppy and unpredictable cryptocurrency ocean. But with seven members of the Libra Council abandoning ship, now only 21 members remain with Facebook’s Libra gambit. CNBC labels the Libra effort as an “embattled cryptocurrency project.”
Certainly, one can see that the storm warning flag has been hoisted high on the mast after seasoned financial sailors like Mastercard and Visa hit the lifeboats. We’ll eat no hardtack and risk no scurvy, the moneyed sailors said, before paddling back to shore. Joining the growing mutiny was eBay, Booking and PayPal. Booking operates OpenTable, Kayak and Booking.com. Only PayU remains on the council as a seasoned payment company.
Treasury Secretary Steven Mnuchin is taking credit for members abandoning ship. It’s rumored that they raised the white flag and piled over the gunwale after Mnuchin told them that Libra is not ready to set sail.
The secretary said he would squash Libra like a bug if Libra didn’t meet specific regulatory standards. Apparently, the dropouts feared being caught up in money-laundering investigations peculiar to cryptocurrency operations.
Call Uber and Sing Orinoco Flow
High-profile members signing the Libra Association charter included Spotify, Lyft and Uber. That’s excellent foresight. Should the Libra ship sink, survivors can call Uber for a lift to shore while singing ”Orinoco Flow.”
As for the five-member Libra board of directors, it will include members from Kiva Microfunds, Xapo Holdings, PayU and Andreessen Horowitz. Facebook’s David Marcus, the company’s No. 1 cheerleader for Libra, rounds out the board. Each board member is expected to give $10 million to run the association. They’ll be responsible to bring their own lunch, rations of rum and emergency beacons.
From the enchanted songs we’re hearing from the Sirens, Facebook is sailing into the teeth of a hurricane of criticism over the impending Libra launch. The company’s abuse of personal data has Washington lawmakers up in arms. Regulators question Facebook’s ability to manage financial services, especially with cryptocurrencies acting as ballast in this scheme.
In the meantime, members of the board may bail out for any reason. Observers have speculated that other board members could abandon ship should government regulators try to captain the ship and pilot the boat into the reefs.
The Next Great Silicon Valley Dog and Pony Show
Most remaining members are venture capitalists looking to make a buck off the Facebook brand. Riding a new cryptocurrency – Libra – to the moon is also enticing. Additionally, dabbling in currency futures that are anchored to a newly-minted cryptocurrency has its attraction.
AP is reporting that an additional 180 entrepreneurs have expressed an interest in joining the Libra team and have passed the test for membership.
Although Facebook is presenting itself as an arms-length participant, congress critters aren’t keen on swallowing that bilge. They have asked Facebook CEO Mark Zuckerberg to perform the next great Silicon Valley dog and pony show before the House Financial Services Committee. That committee is chaired by Zuckerberg critic and financial wizard Rep. Maxine Waters.
Ask Not for Naked Pictures
The Libra Association has vowed not to begin trading Libra until regulators’ feathers have been properly smoothed and combed.
Facebook is scheduled to release the Libra bitcoin in 2020. To do so successfully, Facebook will need to come up with an award-winning song and dance routine to convince naysayers that the Libra scheme is good for money-changers, governments, CIA spies, bureaucrats, politicians, puppies and for peons worldwide. Although asking for naked pictures of everyone involved might sink the whole operation, it probably won’t happen this time. All we can be certain of is that watching a congressional hearing between Zuckerberg and Waters is absolutely worth a big bowl of popcorn.