Libra’s backers have retrenched and plan moving forward with the stablecoin despite the high-profile departure of many payment networks from the project governing body, the Libra Association, in October.
“Any type of innovation of this scale historically has faced some pushback,” said Christian Catalini, co-creator of Libra and who is on leave from MIT’s Sloan School of Management where he is an associate professor. “There is, of course, a number of players that have a vested interest in keeping that way.”
There has been much public information regarding the type of pressure that eBay, Mastercard, Mercado Pago, PayPal, Stripe, and Visa were under for being part of an endeavor, he said while speaking during the MIT Sloan Expert Series. “It is important to remember that all of these companies still can build upon the platform once it is released.”
Catalini then noted that not all of the Libra Association’s current founding members are corporates. One-fifth of the representation is either non-governmental organizations or universities and that the entire membership is willing to go through the process of regulatory uncertainty and regulatory pushback to achieve their mission.
The Libra project is in an iterative phase after a season of harsh encounters with legislators and market regulators in which Facebook and the Libra Association are addressing the various concerns as well as continuing a dialog with regulators, policymakers, NGOs, and other ecosystem participants.
“This was a phase for which we planned,” said Catalini. “Instead of doing what is often done in tech where you deploy something and adapt it after the fact, we realized with Libra that this is a complex regulated industry. If you want to have an impact, you need multiple stakeholders to support the project and move it forward.”
However, Michael Cusumano, a fellow professor at MIT’s Sloan School of Management, has questioned Facebook and the Libra Association’s openness claim regarding the Libra network.
“Facebook is orchestrating all of these different players while it is building the technology,” he said during the webcast. “It does seem to be a Facebook enterprise.”
The social media giant’s decision to be the public face of Libra comes amidst a dearth of trust and goodwill that the company would or could keep users’ personal and transactional data separate.
“So far, almost no data on the internet has been really secure,” he said. “No matter what Facebook has said, I don’t think they really can promise us that.”