Despite a last-minute defector, Facebook Inc’s new association to oversee its global cryptocurrency, Libra, is forging ahead with a five-member board and the support of 21 remaining backers.
At an inaugural meeting in Geneva on Monday, members agreed on interim articles of association laying out how the organisation will be governed, as required by Swiss law, according to a fact sheet provided by the Libra Association.
Libra, part of Facebook’s expansion into e-commerce, will be backed by a reserve of real-world assets, including bank deposits and short-term government securities, and overseen by the Libra Association.
The structure is intended to foster trust and stabilise the price volatility that plagues cryptocurrencies and renders them impractical for commerce and payments.
Most of the association’s decisions will require a majority vote of the group’s governing council, although changes to membership or management of the reserve would require a two-thirds supermajority. However, members can also leave at any time, according to the new charter.
The group elected five people to serve on the board, including Facebook’s David Marcus as well as representatives from Netherlands-based electronic payments firm PayU, venture firm Andreessen Horowitz, blockchain company Xapo Holdings Limited and non-profit Kiva Microfunds.
These companies were either early investors in Facebook or have other links to the social media giant. One such case is Xapo, in which Marcus is an investor.
The charter was signed despite online travel company Booking Holdings, which owns Priceline, Kayak and Booking.com, confirming earlier on Monday that it was pulling out of the group.
Booking was the latest in a string of global backers to shun Facebook’s new cryptocurrency.
“It is a correction; it’s not a setback,” said Dante Disparte, head of policy and communications for the Libra Association.
Libra lost its last global payments backers on Friday when Mastercard Inc and Visa Inc abandoned the Geneva-based Libra Association. EBay Inc, fintech startup Stripe and payments company Mercado Pago have also pulled the plug.
The latest withdrawals followed the departure of PayPal Holdings Inc from the Libra Association earlier this month.
The project is due to be launched by June 2020. Disparte acknowledged that the digital currency’s regulatory issues could push back its launch date.
France pledged last month to block Libra from operating in Europe, while Germany passed strict rules to govern blockchain technology. The Bank of England laid out high hurdles it must meet before its launch and United States Federal Reserve Chairman Jerome Powell has also suggested the project could not advance before concerns were assuaged.
Facebook has described Libra as a community effort, but partners have dwindled from an original group of about 100 partners as regulators step up scrutiny and implement new rules regarding the digital currency.
The exodus followed warnings from politicians and regulators globally that Libra risked upsetting global financial stability, undermining users’ privacy and facilitating money laundering.
Its only remaining payments partner is PayU, which according to its website does not operate in the US, Canada or large swaths of Africa and the Middle East.
The association’s other prominent remaining members include Vodafone Group Plc, Spotify Technology SA and ride-hailing firms Uber Technologies Inc and Lyft Inc.