Facebook partners yet to financially back Libra project
Social network labelled "disingenuous" for downplaying its role in the direction of the group
None of the $10 million expected from each of the Libra Association's 21 partnering firms has been paid to Facebook's Libra cryptocurrency project, despite its projected launch in 2020.
A timeline for the fee was not on the docket for the Libra Association's first general assembly last week, and no formal financial agreement has yet been made, according to the BBC.
One association member said: "The feeling is that we needed to form, ratify a budget, and then figure out how to fund that budget, rather than the other way around."
Some high-profile partners including Visa and Mastercard abandoned the Libra project just before its executive board formed on 14 October. The companies cited concerns about Libra's regulation and stability as reasons for pulling their support, a decision made soon after lawmakers urged Libra payment providers to "proceed with caution".
Distrust in Facebook has played a significant role in the Libra project's stagnation. Though all members have equal say over the Libra Association's actions, some are still sceptical about how much influence Facebook actually has, and how it will shape the cryptocurrency's security given the company's history of data privacy violations.
According to the testimony submitted to the US House of Financial Services Committee, Facebook CEO Mark Zuckerberg will acknowledge this atmosphere of scepticism at his upcoming address at the US capitol, but will underplay the company's role in the voting process.
"The genesis for this idea was with Facebook and now one of its senior employees is a key board member," a congressional staffer noted in an email to CNBC, referring to the election of Facebook's vice president of messaging products, David Marcus, to one of five chairs on Libra's board of directors. "If Zuckerberg tries to downplay Facebook's leverage in the development of Libra, it will come off as disingenuous and not likely to be well received by members."
Zuckerberg has been pushing relentlessly for Libra's launch, and will reiterate in his address that "while we debate these issues the rest of the world isn't waiting", adding that "China is moving quickly to launch similar ideas in the coming months".
However, the projected launch of Libra in 2020 may simply be too ambitious for the pace of Libra's other partners, and moving ahead without proper regulation, a move Facebook's previous statements refused to rule out, may be another major reason for investors' hesitation.
Zuckerberg is also expected to revise his stance on proceeding without regulation when speaking to the House committee later, and will instead "support Libra delaying its launch until it has fully addressed US regulatory concerns."
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