- Facebook's cryptocurrency project held its first meeting for its governing body on Monday in Geneva, Switzerland, as regulatory scrutiny picks up.
- The Libra Council now consists of 21 members, down from the 28 backers who initially said they would join.
- Facebook CEO Mark Zuckerberg will testify in front of congress next week to defend the project.
Facebook's embattled cryptocurrency project has just announced its 21 founding members, a group that lacks many of the high-profile companies that originally voiced support for the effort.
The members, including Uber, Lyft and Spotify, met in Geneva, Switzerland, on Monday to sign onto the Libra Association charter, which will govern the libra cryptocurrency. The board of directors will consist of five people, including David Marcus, Facebook's leader for the project, and representatives from Andreessen Horowitz, PayU, Kiva Microfunds and Xapo Holdings.
The project hit a major snag on Friday, when Visa, Mastercard, Stripe, eBay and Mercado Pago all said they will no longer be part of the Libra project, following PayPal's decision to pull out earlier last week, and leaving PayU as the only remaining payments company on the council. Support dwindled further on Monday, with the departure of internet company Booking, which operates sites including Booking.com, OpenTable and Kayak.
Facebook announced plans in June to create a new digital currency called libra that would be run by a nonprofit association supported by a range of companies and organizations. The company said at the time that each member of the association will manage one of the "nodes," or locations where transactions involving Libra are validated.
Since then, Facebook has faced an onslaught of criticism from regulators and lawmakers who are skeptical of the company's ability to manage the risks and rigors of financial services given its many snafus in the handling of personal data. Facebook CEO Mark Zuckerberg will face lawmakers next week to defend the project at a hearing in front of the House Financial Services Committee. Several members of the committee have asked Facebook to postpone its plans until the proper regulatory mechanisms are in place.
That was the backdrop for Monday's meetings. Several of the founding members reaffirmed their commitment while acknowledging that it has a long way to go.
"Though it is still in the early stages, we look forward to exploring the opportunity offered by the Libra Association to empower billions of people globally, especially in financially underserved markets," Spotify said in a statement.
According to the council's interim articles, each member has one vote and is expected to recuse itself if there's a conflict of interest. A two-thirds vote of the council is required to admit or oust a member of the council or board, adopt a new amendment of the articles or a key libra policy or dissolve the association.
In a tweet after Monday's announcement, Marcus said "it was energizing to see reps from many different industries, and interests come together with one mission at heart."
The remaining members of the Libra Council still have an out should they determine the regulatory hurdles are too steep. Members may leave for any reason, according to the "interim articles of association." They may transfer their membership "under limited circumstances."
Each member is expected to invest $10 million to fund the association and launch an incentive program for libra.
Women's World Banking, a group focused on helping to develop financial solutions in emerging markets, said in a statement that it "deems this as an important business initiative, if done right, to provide greater opportunity for low-income women to receive greater access to formal financial services."
Here's the full list of members:
Creative Destruction Lab
Union Square Ventures
Women's World Banking