On February 21, Canadian e-commerce platform Shopify has joined the Libra Association, a network of founding members that support Facebook’s Libra cryptocurrency project. This comes after a number of top organizations abandoned the association.
Dante Disparte, Libra Association head of policy and communications, confirmed the announcement in a LinkedIn post. He welcomed Shopify and highlighted their achievements, further saying that the e-commerce platform “brings a wealth of knowledge and expertise to the Libra project.”
Following this collaboration, Shopify will contribute a minimum of US$10 million [AU$ 15 million] and gain one vote on the association’s council. Shopify will also be given access to operate a node that processes transactions for Facebook’s stablecoin, Libra.
Payments made easier and cheaper
With Libra designed to move between wallets with zero fees, Shopify and the one million merchants running online shops on its platform could achieve a way to process transactions without incurring credit card fees.
Additionally, Shopify revealed plans to create a payment network that makes money easier to access and supports merchants and consumers around the world.
“Our mission has always been to support the entrepreneurial journey of the more than one million merchants on our platform. That means advocating for transparent fees and easy access to capital and ensuring the security and privacy of our merchants’ customer data. We want to create an infrastructure that empowers more entrepreneurs around the world,” Shopify said.
Libra: Regulatory issues, member abandonments
Since its inception, the Libra Association has experienced difficulty with different regulators from the United States, the European Union, and others around the world. This results from fears that it would help terrorists launder money, hurt people’s privacy, or weaken nations’ power in the global financial system.
French Finance Minister Bruno Le Maire went as far as saying that digital currencies such as Libra threaten the monetary sovereignty of countries from “possible privatization of money,” and thus cannot be authorized to develop on European soil.
Additionally, the regulatory difficulty has made the Libra Association lose some of its members. This includes traditional payment processors like Visa and MasterCard, online processors like Stripe and PayPal, and marketplaces like eBay. Others include Vodafone, Mercado Pago, and Bookings Holdings.
However, Mastercard President Ajay Banga claims in an interview with the Financial Times that other concerns around the cryptocurrency project made his company leave the association.
“It went from this altruistic idea into their own wallet. I’m like: ‘this doesn’t sound right.'”
Notably, Tobi Lutke, Shopify’s CEO, commented on his company’s decision to join Libra despite the difficulties faced. He said:
We like to make decisions based on future potential instead of heard movement. Funnily enough this usually leads to us doing the opposite of the others
— Tobi Lutke ???????????????? (@tobi) February 21, 2020
The Libra Association originally had 28 total members when the global cryptocurrency project was announced last June 2019.
At the moment, only 21 members exist, including the new membership of Shopify. Other members of the association include the following:
- Blockchain platforms Coinbase, Xapo, Anchorage, and Bison Trails
- Digital marketplaces and fintech Uber, Lyft, Spotify, Farfetch, PayU, and Facebook subsidiary Calibra
- Telecommunication company Illiad SA
- Venture capitals Ribbit Capital, Thrive Capital, Union Square Ventures, Andreessen Horowitz, and Breakthrough Initiatives
- Nonprofit and academic institutions Mercy Corps, Women’s World Banking, Creative Destruction Lab, Kiva