Shopify Joins Libra While Quitter Vodafone Advertises Bitcoin on Facebook


Shopify Joins Libra While Quitter Vodafone Advertises Bitcoin on Facebook

Facebook’s coin project, Libra, continues to draw attention despite setbacks, including a shrinking pool of backers and a growing number of worried regulators. But now with JP Morgan seeing potential for the social network’s cryptocurrency and e-commerce giant Shopify joining the Libra Association, its chances might have improved. Although, assuring governments that Libra won’t undermine their monetary authority and convincing users of its utility remain key challenges.

Also read: Fed Chair Powell Reveals US Response to China’s Digital Yuan, Libra, Public Payments Ledger

Vodafone Posts Facebook Ad With Bitcoin in Germany

Libra’s long list of supporters has shortened in the past few months with major players such as Visa, Mastercard, Ebay, and Paypal leaving the Libra Association after it became clear that the project is facing major regulatory hurdles. Online payment processor Stripe, travel website Booking Holdings and the South American online sales platform Mercado Pago are also among the quitters.

Vodafone pulled out of the project last month becoming the eighth company to do so. The telecom giant, which operates in two dozen countries and serves clients in many more, recently spurred social network discussions and speculation in crypto media with a move that some took as an indication of its future plans. On Friday, Vodafone posted a Facebook ad in German that shows a bitcoin and the following message:

Will there be bitcoins instead of pocket money soon? What should grandma give you if everyone will pay with their smartphone in the future?

Vodafone left Libra to focus on M-Pesa, its own digital payments platform. Launched in 2007 by its Kenyan associate Safaricom, M-Pesa has established itself as the leading mobile money service in Africa. It now has 37 million active users in seven countries in the region, who carried out over 11 billion transactions in 2019. But it does not support Bitcoin, not yet.

Swimming Against the Current, Shopify Bets on Libra

Not everyone is leaving Libra, though. In fact, the majority of founding members are still on board. The updated list published recently by the Telegraph features the names of companies from various sectors including Facebook’s subsidiary Calibra, crypto firms Coinbase, Anchorage, Bison Trails, Xapo Holdings, and also Uber, Lyft, Spotify, Farfetch, Payu, Iliad, Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures, Creative Destruction Lab, Kiva, and even NGOs like Mercy Corps and Women’s World Banking.

Shopify Joins Libra While Quitter Vodafone Advertises Bitcoin on Facebook

Shopify, the Canadian e-commerce platform, became the latest enthusiast to join the club. The company, which offers services and solutions for over a million small merchants and online retailers, announced its decision to become a member on Feb. 21, pledging to invest $10 million in the project. “We spend a lot of our time thinking about how to make commerce better in parts of the world where money and banking could be far better,” Shopify stated in a blog post, adding: “As a member of the Libra Association, we will work collectively to build a payment network that makes money easier to access and supports merchants and consumers everywhere.”

Having announced it last June, it remains unclear whether Facebook will be able to launch Libra in the first half of 2020, as initially planned, or even by the end of this year. Both Facebook founder Mark Zuckerberg and the head of Calibra David Marcus have already answered questions in the United States Congress about the social media giant’s plans for the project, in an effort to alleviate concerns expressed by policy makers who fear Libra could undermine the U.S. dollar and challenge its supremacy as a global currency.

Antitrust regulators in Europe have been investigating the project as well. A new memo issued by the Vice-President of the European Commission (EC) Valdis Dombrovskis reveals Brussels is unhappy that the available information on Libra “lacks detail” and even after additional questions were sent to the association, it “remains insufficient for determining the precise nature of Libra” and its relation with existing EU law. “Libra is still a project, and thereby a moving target,” Dombrovskis notes and reminds about the Dec. 5 joint statement of the Commission and the Council of the European Union recognizing the risks raised by stablecoins and the need for regulation and oversight. The EC is currently gathering feedback from citizens and organizations to establish a regulatory framework, one of the goals of which is to “harness the potential opportunities that crypto-assets may offer.”

Shopify Joins Libra While Quitter Vodafone Advertises Bitcoin on Facebook

JP Morgan Recognizes Maturing Crypto Market but Sees Focus Shifting Towards Stablecoins

In its annual report on blockchain and cryptocurrency developments, JP Morgan Chase acknowledges that the crypto market continues to mature but notes that the characteristic volatility of cryptocurrencies remains an impediment to broader adoption. One that has also “led focus towards stablecoins.” The multinational investment bank, which issued its own digital coin representing fiat currency to facilitate payments between clients, believes that stablecoins have the potential to grow substantially in global transactions, despite certain challenges with operating such payment systems. The authors of the study point out:

While the world is ready for private money in our view, rapid adoption and scale are hindered by the underlying technology and the need for substantial regulatory oversight.

JPMC also notes that financial inclusion is one of the motivations behind Libra and that if the unbanked consumers were to drive the growth of the cryptocurrency, the project would be more about peer-to-peer payments and could support a significant share of global transactions. Currently, the global economic activity is far more concentrated among countries with higher levels of inclusion, according to data from the World Bank quoted in the report. For a stablecoin like Libra to succeed, the bank elaborates, it would require a few changes to its design such as “some short-term liquidity facilities, a source of positive-yielding reserve assets, and less distributed, semi-private networks.”

What are your expectations about the future of Facebook’s Libra project? Share your opinion in the comments section below.

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Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Bulgaria. Quoting Hitchens, Lubomir says: ”Being a writer is what I am, rather than what I do.“ International politics and economics are two other sources of inspiration.





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