Shopify (SHOP.NYSE) is the latest company to get into bed with the revolving door of financial companies supporting Facebook’s (FB.Q) cryptocurrency project, Libra.
Facebook announced their intention to launch a global payments project called Libra over the summer. Libra was intended to be a stablecoin, or a digital currency backed by a basket of fiat currencies, and its superpower was the ability to skip undetected over international borders without being effected by government intervention.
The benefits to the global remittances market would be obvious, as data from the World Bank states that over $148 billion was sent abroad from the U.S. in 2017.
“Our mission is to make commerce better for everyone and to do that, 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. That’s why we decided to become a member of the Libra Association. This is one step, but not the only step we’ll be taking to be a part of the solution to this global problem,” wrote Shopify in a blog post announcing the news.
Government resistance
Naturally, world governments haven’t been quiet on the inherent challenges brought by a Mark Zuckerberg backed stablecoin.
“I want to be absolutely clear: in these conditions, we cannot authorise the development of Libra on European soil, “ said Bruno LeMaire, finance minister for France.
While others, including Mark Carney, the governor of the Bank of England, had other ideas.
“Even a passing acquaintance with monetary history suggests that this center won’t hold. Let’s end the malign neglect of the international monetary and financial system and build a system worthy of the diverse, multipolar global economy that is emerging.”
Meanwhile, in North America, the United States congress had some pointed statements for the project.
“Facebook has demonstrated through scandal after scandal that it doesn’t deserve our trust. It should be treated like the profit-seeking corporation it is, just like any other company,” said Senator Sherrod Brown (D- Ohio).
Revolving door
Since its inception, the Calibra project has seen some of its most high profile supporters depart through the revolving door for greener pastures, perhaps frightened off by the promise of political regulations. Visa, Mastercard, PayPal, Booking Holdings, eBay, Stripe and Mercado Pago were originally meant to be part of the project but withdrew before the council was formed. Vodafone remained a member until January.
Some of Calibra’s other members include:
- Coinbase,
- Creative Destruction Lab,
- Andreessen Horowitz,
- Thrive Capital,
- Uber
- Lyft
- and Mark Zuckerberg’s Breakthrough Initiatives.
What’s in it for Shopify?
The blog post continued in saying that the world’s existing financial infrastructure wasn’t built to scale for the needs of internet commerce. The implication being that they wanted to be a part of a team tasked with infrastructure upgrades to empower more entrepreneurs around the globe.
Libra Association head of policy and communications Dante Disparte said the group was “proud” to welcome its new, and now 21st member.
“As a multinational commerce platform with over one million businesses in approximately 175 countries, Shopify, Inc., brings a wealth of knowledge and expertise to the Libra project. Shopify joins an active group of Libra Association members committed to achieving a safe, transparent, and consumer-friendly implementation of a global payment system that breaks down financial barriers for billions of people,” said Disparte.
They’re probably right about the infrastructure not being quite ready, of course. But that doesn’t mean that Calibra is going to have a part to play—not as long as they have collected the ire of the world’s governments.
—Joseph Morton