The Libra Association, announced this week, brings together a number of sizable companies (including Facebook) that hope to provide a more stable alternative to bitcoin and similar cryptocurrencies.
Facebook’s latest business move might be the most high-profile example of cryptocurrency launched by the business world.
But Libra, which was announced Tuesday, is not something Facebook is doing alone. Far from it: 27 other partners will be taking part in the ambitious plan, which will attempt to build a bitcoin-like cryptocurrency that has a stable value and the backing of traditional currencies.
The currency, its creators promise, will allow more privacy and the ability to make transactions with minimal fees.
At the center of this collaboration will be the Libra Association, which includes members as prominent as Spotify, Stripe, Uber, and the venture capital firm Andreessen Horowitz. The association, which will be based in Switzerland, sports many of the industry’s biggest players in multiple fields, including telecom, payments, venture capital, blockchain, and nonprofits.
“The founding members of the association each run one of the validator nodes that form the network that operates the Libra Blockchain,” the Libra website states. “One of the association’s directives will be to work with the community to research and implement the transition to a permissionless network over time.”
The new collaboration appears to have the support of players that have already seen success with the prior economic structure—Visa and Mastercard are each members of the organization, along with PayPal. Many cryptocurrency efforts have been attempts to replace offerings created by these companies.
“We believe that collaborating and innovating with the financial sector, including regulators and experts across a variety of industries, is the only way to ensure that a sustainable, secure, and trusted framework underpins this new system,” the Libra Association said in a news release [PDF]. “And this approach can deliver a giant leap forward toward a lower-cost, more accessible, more connected global financial system.”
Taking part in Libra won’t be cheap and, by definition, becoming a founding member will be exclusive. According to The Block Crypto, Libra Association members are expected to be in a position to invest in at least $10 million in Libra Investment Tokens, unless the organization is a nonprofit. Additionally, each organization, including nonprofits, will have to cover the costs of running a validator node—estimated to be about $280,000.
Most organizations taking part will be required to be of a certain size—with criteria including a $1 billion or more market value, a reach of 20 million or more people annually, and a ranking as a top–100 company by a third-party organization. The organization will make exceptions to these requirements for crypto firms, as well as social impact partners and academic institutions—with different rules for the latter two types of organizations.
The design is intended to limit influence of any one organization—with no member receiving more than 1 percent of voting rights in the association.