Editor's Note: Original text fromNew York TimesEditor's Note: Original text from
New York Times
, Author: By Nathaniel Popper, original title: "Regulations are questioning Facebook's cryptocurrency, and so are its partners", compiled by Xin Nan.
The 27 partners announced by Facebook Libra have become one of Libra's biggest selling points. Among them, well-known institutions including Visa, Mastercard, and Uber have participated in the Libra project.
But currently, some partners are "cautiously" working with Libra.
After confirming their participation in the Libra project, the partners signed non-binding agreements, executives from seven of the companies said on condition of anonymity.
These companies believe that they are not obliged to use and promote digital currencies. Therefore, after signing a non-binding agreement, if corporate partners do not agree with Libra's development direction, it will also help these companies to exit easily.
Facebook executives hope that Libra can become a new type of financial infrastructure in the future, but Libra faces more and more challenges.
Soon after the announcement, Libra attracted the close attention of regulators from all over the world.
Maxine Waters, chairman of the House Financial Services Committee of California, quickly scheduled a hearing on Libra to investigate Libra and asked Facebook to stop developing the Libra project until major questions are answered.
Federal Reserve Chairman Jerome H. Powell also said on Tuesday that the central bank would look at Libra "very cautiously" given its potential size. “I think we’re going to have very, very high expectations for Libra from a consumer protection and regulatory standpoint,” Powell said at an event at the Council on Foreign Relations in New York.
In addition, European regulators have also demanded more details on the project.
When Facebook Libra was announced, it was stated that each cooperative enterprise needs to pay at least 10 million US dollars to become a member of Libra's 100 foundations.
But the money didn't go to Facebook.
According to executives of the seven companies mentioned above, many partners believe that they will make a decision whether to pay $10 million to join the Libra Foundation only after a clearer Libra operation plan is released.
In a statement, Facebook spokeswoman Elka Looks said the company plans to "engage in conversations and discussions with some of the founding members and welcome additional members in the coming months."
Dante, a spokesperson for the Libra Foundation, said that since the launch of Libra last week, the Libra Foundation has received a large number of letters from companies interested in becoming members. He revealed that the current Libra Foundation is likely to hold a "waiting list", which is a list of companies that hope to join the Foundation next year.
Before the Libra project began, its potential partners also expressed their concerns.
Facebook has approached several major financial firms about the Libra project, including Goldman Sachs, JPMorgan Chase and Fidelity, according to two people familiar with the matter.
The above-mentioned people familiar with the matter said that these financial companies all refused to join due to cryptocurrency regulatory issues.
A spokesman for Fidelity said it will continue to monitor the project.
Questions from partners have added new challenges to Facebook.
Due to Facebook Libra's regulatory issues, the legality of cryptocurrencies, and Facebook's previous privacy scandals, some partners are reluctant to associate themselves closely with Libra.
Facebook did manage to sign up two big credit card companies, Visa and MasterCard, as partners. But according to documents leaked by The New York Times, Mastercard was one of the last companies to agree to join the Libra project.
After the launch of Libra, Mastercard only supported it through the solidarity of one executive. But the full name of the Libra project was not mentioned in its statement.
In fact, not just MasterCard, there are still many partners who avoid standing up for Libra with great fanfare.
Several of the partners have resisted Facebook’s request to make the news public and have been reluctant to speak to the media about their support for Libra, according to four people familiar with the negotiations.
If Libra succeeds in its goal of lowering the cost of digital payments, it could pose new challenges to partners such as Mastercard, Visa, Stripe and PayPal.
Coinbase, the largest cryptocurrency company in the United States, is one of Libra's original 27 partners.
But when the company announced its partnership with Facebook, some employees expressed concern about the move to join forces with the Facebook giant, according to two Coinbase employees. This concern comes more from Facebook's dark history on issues such as privacy, and they worry that privacy has become a major issue for cryptocurrency enthusiasts.
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(At lunchtime at Coinbase, some employees at the company were said to have expressed concerns about working closely with Facebook.)
A Coinbase spokesman declined to comment.
Joe Lallouz, CEO of another cryptocurrency firm, Bison Trails, said he was also skeptical when Facebook approached him.
"My first reaction was: 'You (Facebook) don't have the best credit history from a data privacy standpoint,'" Joe Lallouz said in an interview. "Facebook's reputation for data privacy and its trustworthiness The ethos of centralized endorsement is against the spirit of cryptocurrencies.”
But Lallouz said Facebook has shown it is serious about protecting user privacy and making sure it doesn’t have much control over Libra.
In the design of Facebook Libra, governance rights are handed over to the foundation, and 100 partners in the foundation have only one vote.
"They've given up control and ownership of this huge project," Joe Lallouz said.
FB partners are expected to meet in the coming months to draft a charter governing the foundation.
