No one thought setting up a globally acceptable cryptocurrency such as Facebook’s Libra would be easy. But the Libra Association’s upcoming meeting in Switzerland may show which of its members are in for the long haul.

Supporters of cryptocurrencies welcomed the formation of the Libra Association by Facebook and other partners such as Visa and Mastercard. Deep-pocketed and influential backers would be essential to steer the project past the minefields of regulatory scrutiny. Not to mention the acceptance of the new digital coins through existing global systems of payments and transfers.

Libra Association encounters unexpectedly harsh regulatory backlash

But Libra backers perhaps did not expect the extent of regulatory and governmental opposition to the new coin.

French Minister of Economy and Finance Bruno Le Maire vehemently objected to Libra saying “the financial sovereignty of the National States is at stake.” He expressed fears that Libra could replace the currencies of weak countries and endanger their sovereign independence.

Le Maire was also apprehensive of a systemic risk to the global financial system and the clout of Facebook’s massive user base of over two billion users.

Germany too expressed its reservations against Libra, while in the USA, the digital currency is going through regulatory scrutiny. Preliminary noises emanating from legislators do not appear to be very receptive of Libra.

Libra Association to close ranks?

Unfortunately, far from presenting a united front to take on the opposition, the Libra Association appears to be showing cracks.

A report in the Financial Times said that intense regulatory heat on Libra had spooked some of the Association members. Further, at least three of them were privately considering backing out from the project.

On the flip side, it has been Facebook’s grouse for some time that Association members do not publicly support Facebook’s efforts to take Libra forward. “Facebook is tired of being the only people putting their neck out,” one unnamed member said in August.

The Libra Association’s upcoming meeting in Switzerland on October 14 may address these issues, therefore.

Facebook’s Tweetstorm of denial

The Wall Street Journal appears to have picked up the undercurrents. On October 1, the WSJ tweeted: “Visa, Mastercard and other key financial partners are reconsidering their involvement in Facebook’s Libra, people familiar with the matter say.”

Facebook’s David Marcus tweeted in response that the Libra Association would formalize its first wave of official members in coming weeks. He said it would be a long journey that required courage.

“For Libra to succeed it needs committed members, and while I have no knowledge of specific organizations plans to not step up, commitment to the mission is more important than anything else.”

Libra Association members sitting on the fence may have to soon decide one way or the other.