Facebook-backed digital currency project Libra has a new member
- Checkout.com is the first payments firm to join the Libra Association since Visa, Mastercard and Stripe pulled out over regulatory concerns.
- Libra, a digital currency initiative set up by Facebook last year, was met with almost instant backlash from global policymakers.
- The project recently overhauled its plans, proposing several currency-backed stablecoins and one single multi-currency token.
British payments start-up Checkout.com has joined the Libra Association, the digital currency project set up by Facebook last year.
Checkout.com is the first payment processor to join the initiative since U.S. giants Visa, Mastercard and Stripe all pulled out over regulatory concerns in October. In recent weeks, other firms have said they will back Libra, including e-commerce giant Shopify, non-profit organization Heifer International and cryptocurrency brokerage Tagomi.
Libra was introduced by Facebook back in June as a global currency that would allow users to make faster and cheaper cross-border payments. But the project quickly drew the ire of policymakers around the world who worried it could heavily disrupt the financial system, risk potential money laundering and compete with fiat currencies like the U.S. dollar.
Checkout.com CEO and co-founder Guillaume Pousaz acknowledged that blockchain — a technology originally conceived as the network underpinning bitcoin — should be regulated when it comes to payment processing. He added that members of the Libra Association "share" that philosophy.
"In the past few years, we have witnessed from afar the birth of various digitally native currencies," Pousaz wrote in a blog post Tuesday. "We are technologists at heart and have always been fascinated by blockchain and the potential benefits it could bring to global transaction processing."
But he said regulation should be "integral" because of its "unique ability to protect the ecosystem from systemic abuses."
"Absent of such regulation, it is our fundamental belief that the technological advancements alone would fail to provide the secure and stable payments infrastructure required to drive mass adoption, impeding its progress," he added.
Dante Disparte, head of policy and communications at the Libra Association, said the group was "thrilled" to welcome Checkout.com as a member.
"The organization joins a dynamic and growing 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," Disparte said in a statement emailed to CNBC.
The Libra Association recently revealed an overhaul to its planned digital currency, proposing to launch several so-called "stablecoins" pegged to different government currencies, as well as a single, multi-currency libra token. The Switzerland-based group has applied for a payments license with local regulator Finma.
The association also said it would forgo its initial aim to move to a "permissionless" blockchain system which would have allowed anyone to contribute to the network. Instead, it's settled for a more centralized structure that will be governed by its now-24 members.
This means that libra will be different to cryptocurrencies like bitcoin, as bitcoin's network can be accessed and maintained by anyone with decent enough hardware and access to the internet.
Checkout.com is a competitor to the likes of Stripe and Dutch firm Adyen, which have made it easier for firms to integrate online payments. The company was last year valued at $2 billion in its first funding round — a $230 million deal that was agreed over handshakes, rather than with traditional term sheets.