For Non-Profits Working With Facebook, Libra Isn’t Such a Crazy Idea

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Oct 9, 2019 at 07:00 UTC news
This is one of a two-part series on why non-profits are participating in the Facebook-initiated Libra Association.
The Takeaway: Lost in Libra’s regulatory limbo has been a discussion of the cryptocurrency’s stated intention: to bring the global poor into the modern financial system. Many non-profits have been working on just this issue for a very long time. To its credit, Facebook recruited a few of most forward-thinking organizations into the association. Those non-profits who had already seen potential advantages in blockchain technology to better serve their target populations. Were these do-gooding organizations brought on as mere window-dressing? Women’s World Banking and Mercy Corps tell CoinDesk they won’t stick around if their missions aren’t served by Libra.
Who can unlock true global financial inclusion? Perhaps a Harvard dropout can succeed where so many others have failed.
According to its announcement materials released in June , the top priority for Libra, the stablecoin invented by Mark Zuckerberg’s Facebook, is to reach the unbanked. Yet, most of its founding partners are laser-focused on the developed world, such as Uber, Mastercard, Stripe and eBay.
So how does the association expect those who struggle the most with financial access to get their hands on its low-volatility cryptocurrency? The group’s four non-governmental organizations (NGOs) might be key.
Among the 27 founding partners (it was 28 before PayPal dropped out of the project last week), there’s a small cadre of four non-profits focused on reaching that population: Mercy Corps, Women’s World Banking, Kiva International and Creative Destruction Lab.
To date, there have only been hints about how the rollout of the Libra cryptocurrency might actually work – in part because most of the attention since June has been on regulators’ general opposition to the project. It’s easy to forget that Libra was intended for places like Uganda, Pakistan and Indonesia when its fate is in the hands of the U.S. Congress and Frankfurt .
But the impact partners are cautiously optimistic about Libra’s potential and pleased with the association’s willingness to give them a full seat at the table, despite the fact that they won’t be buying a Libra Coin, the $10 million governance token the rest of the partners are on the hook for.
“This little group of NGOs … we’re not being set up to be a hood ornament from the inside,” J. Tom Jones, chief operating officer of Women’s World Banking (WWB), told CoinDesk in an interview. “That was really important from a risk analysis perspective.” All eyes on Oct. 14
The association is making decisions about how it will govern itself right now, and both partners CoinDesk spoke with say they believe they have a full voice at the table. Libra Association members will gather in Geneva on Oct. 14 to formally ratify the group’s charter.
“If we had been presented the opportunity to join something where all the questions were answered and everything was baked, it probably wouldn’t have been compelling to us,” Jeremiah Centrella, general counsel for Mercy Corps, told CoinDesk in an interview.
For his part, Jones saw no particular danger to his organization in helping get the new cryptocurrency off the ground.
“Ultimately, Women’s World Banking, as well as the other impact partners, we hold the ultimate decision in that we can leave,” he said. “I firmly believe if we leave, it sends a big signal.”
Since PayPal’s departure, spokespersons for Mercy Corps, Women’s World Banking and Kiva all confirmed their plans to remain in the association. Creative Destruction Lab has not replied to CoinDesk’s request for comment.
That said, if something did move the organization to leave, Jones promised:
“It’s not like we’d go quietly. If we deem this won’t work for us, we’ll say why.”
A natural question for impact partners: Are they receiving financial support from Facebook or the Libra Association? Jones declined to comment. A spokesperson for Mercy Corps said, “There was conversation around grants for actual operation. And that’s part of a conversation we’re having.” Mission statements
The Libra Association has limited its impact partners to organizations with at least a five-year track record of financial inclusion programs and a $50 million operating budget.
Mercy Corps and WWB both have a strong emphasis on advancing the financial outcomes of their respective constituencies.
Mercy Corps has always taken a market-driven approach to interventions, Centrella explained. “By the time Facebook reached out to us, we had already created an executive team working group on distributed ledger technology,” he said.
Centrella’s non-profit has worked on things like microfinance and financial inclusion, seeking community-driven ways to come back from disaster or achieve economic growth. It also put out a white paper in 2017 on the potential for blockchain in the non-profit sector.
But why the early interest? Mercy Corps gen...