Facebook's libra backers are turning to a rival crypto effort - TechCentral

Facebook’s libra backers are turning to a rival crypto effort

Many members of the Libra Association — a Facebook-led effort to create a global cryptocurrency — are now also backing a rival effort.

The project, the Celo Alliance for Prosperity, announced its 50 founding members on Wednesday. They include Libra supporters Anchorage, Bison Trails, Coinbase Ventures, Andreessen Horowitz and Mercy Corps. The effort is designed to deliver humanitarian aid, facilitate payments and enable microlending through a cryptocurrency called the celo dollar, which is scheduled to launch in April.

The new alliance is debuting just as Facebook and its partners are considering redesigning the libra project in the face of regulatory and political scrutiny around the world. In recent months, the libra consortium has lost several key members. By backing the Celo Alliance, some of libra’s remaining members are essentially hedging their bets.

“There are some similarities in terms of mission, which is why there are some people who have joined both alliances,” Chuck Kimble, who heads the Alliance for Prosperity, said in a phone interview.

Libra has been controversial since its inception largely because of Facebook’s involvement; Celo may avoid some of the liabilities that come from the social network’s reputation. But the new effort also lacks a key part of libra’s appeal: a tie-in to Facebook’s two billion monthly active users. It also has to compete with established payment networks such as PayPal.

The value of the celo dollar will be pegged to the US dollar and backed by a reserve of other cryptocurrencies, Kimble said. It will be available in the US, but the alliance’s focus is on Latin America, Africa and Southeast Asia, he said.

Shared goal

“We have met with governments around the globe as well as central banks, we are continually engaging with governments in the many countries which we hope to serve,” Kimble said.

Diogo Monica, president of Anchorage, which is a part of both efforts, said in a statement: “Celo and libra each have unique focuses and approaches, but they share a goal that Anchorage strongly believes in: banking the unbanked. As advocates for a more fair and open financial system working to support every protocol our clients wish to participate in, it’s our duty to support both.”  — Reported by Olga Kharif, (c) 2020 Bloomberg LP

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