After a number of firms ditched the Facebook-backed cryptocurrency, Libra, months back, the currency has added another feather to its cap, as Shopify joined the league.
Some of the companies that ditched the currency are Vodafone, Visa, Mastercard, Stripe, PayPal, Mercado Pago, Bookings Holdings, and eBay. However, Libra scored a win recently as a new member, Shopify joined the platform.
Shopify, a Canadian e-commerce company, will be contributing at least $10 million to Libra while also operating in a way Libra cryptocurrency would be used in transactions on the e-commerce websites.
Why it matters to Shopify: Chief Executive Officer, Shopify, Tobi Lukte explained that the company joined Libra’s Association because of the advantages merchants and shoppers would have using the currency as an option for a mode of payment on the shopping platform.
Libra is designed to meet the shopper’s needs without having to pay for credit card fees which mean wallets with zero fees or nearly zero fees on them can still be used for shopping.
“Shopify spends a lot of 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,” Lukte stated on Twitter.
Also commenting on the new partnership was the Head of Policy and communications of the Libra Association, Dante Disparte, who welcomed Shopify with excitement into the association.
“We are proud to welcome Shopify, Inc. (SHOP) to the Libra Association. 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,” Disparte said.
What this means: As part of the Libra Association, Shopify will become a validator node operator, gain one vote on the Libra Association council and can earn dividends from interest earned on the Libra reserve in proportion to its investment, which is $10 million at a minimum.
Why are firms exiting the association? The Libra Association had lost much of its members especially e-commerce and payment companies like eBay, PayPal, stripe, and Mastercard. This is due to the regulatory scrutiny Libra has faced since Facebook announced the plans of launching the cryptocurrency, which is considered to be the largest digital currency.
There have been doubts that Libra might not get the regulatory approval needed to operate and already, public perception is against the digital currency, as the outburst from governments has portrayed it as a dangerous currency not to be used for trade.
The criticism is believed to be overwhelming for some of these Libra Association members, which is why they decided to take a bow. Also, fear of government clampdown on their other businesses is compelling some of them to rethink their association with Libra, factoring the cost of a face-off with the government.
Meanwhile, Current members of Facebook’s Libra Association include; Shopify, PayU, Farfetch, Lyft, Spotify, Uber, Illiad SA, Anchorage, Bison Trails, Coinbase, Xapo, Andreessen Horowitz, Union Square Ventures, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Creative Destruction Lab, Kiva and Mercy Corps, Women’s World Banking.