Vodafone leads the calls for independent chief of Facebook's cryptocurrency Libra Save Cryptocurrency
V odafone has called for the rapid appointment of an independent chief executive of Libra to fully separate it from Facebook, as it reiterated its support yesterday for the troubled crypto-currency project..
Nick Read, chief executive of the FTSE100 mobile phone giant, said independent leadership was essential to guarantee the success of the ambitious scheme.
“It needs a chief executive for that business,” he said.
“The sooner a chief executive is appointed to lead it going forward that is not [from] Facebook, then people will then understand the ambition of the entity itself.”
Vodafone is one of the founding members of Facebook’s Swiss-based Libra Association, the governing body that will run the international digital coin.
Speaking with journalists at Vodafone’s Düsseldorf base, Mr Read said Vodafone remained fully committed to the project, which has suffered a string of problems including the loss of some key partners including PayPal.
He said: “It is at super early stages. There are a lot of regulatory hurdles to go through. We are signing it.”
The Vodafone boss added the firm would need a leader who was viewed as being independent of Facebook and that the Association was poised to begin a process to pick an appointee.
F acebook hopes to launch the new currency as soon as next year, forcing the members of the new group to decide whether to sign up to its articles of association. They have their first group meeting next week, on October 14.
The crunch decision has prompted some to express reservations.
Last week PayPal confirmed it was pulling out of the Association, a founding group of 28, now 27, who were due to develop and run the coin, which would be backed by regular currencies including the dollar and sterling and exist only in a digital form like Bitcoin.
Most members remain on board but their support comes with conditions. Facebook Libra | Q&A Regulator qualms
L ibra will let users make cheaper foreign payments and money transfers. There are plans for it to work with Facebook’s WhatsApp and Messenger services, while the company has also spun out a separate company, Calibra, that will take control of developing a digital wallet for Libra coins.
But the project has come under enormous pressure from regulators. Calibra’s David Marcus, the Facebook executive charged with running the initiative, has been dragged before US politicians to answer questions, while central bankers in Europe have warned the coin represents a power grab by Facebook over sovereign currencies. Facebook's cryptocurrency | Read more
O n Tuesday, the European Commission’s incoming financial services chief Valdis Dombrovskis said there was a need to “regulate Libra to supervise it on an EU level both from the point of financial stability and protection of investors”.
W hile PayPal is the only Libra member to have left, other Libra members, including payments providers Visa, MasterCard and Stripe, are understood to have reservations about how the coalition works.
In a response to PayPal's departure, Libra’s head of policy Dante Disparte said: “It requires a certain boldness and fortitude to take on an endeavor as ambitious as Libra – a generational opportunity to get things right and to improve financial inclusion. The journey will be long and challenging.”
“We’re better off knowing about this lack of commitment now, rather than later.” Conflicts of interest?
T here have been questions raised over the independence of some other Libra Association members.
Whilst some backers are multinational corporations with their own interests, others are smaller financial institutions or venture capital firms.
Marc Andreesen, partner and founder of venture capital firm Andreesen Horowitz, a Libra member, sits on Facebook’s board. Mark Zuckerberg, meanwhile, is a director at Breakthrough Initiatives, another Libra member.
On Twitter last month, Calibra boss Marcus set out to defend the new cryptocurrency.
“We will continue to engage with central banks, regulators, and lawmakers to ensure we address their concerns through Libra’s design and operations,” he said.
He added the Libra Association would take on “full leadership of the project” once its charter has been ratified.
V odafone’s Read said there was still work to be done to ensure “clarity” around the regulatory framework of Libra, setting it up to “acknowledge regulatory requirements”.
He added the collective alliance could have worked on this sooner. Technology intelligence - newsletter promo - EOA A gamble worth taking
T here are huge potential advantages for firms involved in Libra if the scheme succeeds. If digital payments technology takes off, the volume of transactions could be huge. The group will earn dividends from the massive batch of reserve currency used to manage Libra’s payments.
A company like Vodafone could also use it as a tool to improve its own payments service, the pan-...