After eBay, Visa, Stripe, and other high-profile departures, the Facebook -backed cryptocurrency collective Libra scored a win today with the addition of Shopify. The ecommerce platform will become a member of Libra Association, contributing at least $10 million and operating a node that processes transactions for the Facebook-originated stable coin.
If Libra manages to assuage international regulators’ concerns which are currently blocking its roll out, Shopify could gain a way to process transactions without paying credit card fees. Libra is designed to move between wallets with zero or nearly-zero fee. That could save money for Shopify and the 1 million merchants running online shops on its platform.
Shopify stressed that helping merchants reduce fees and bringing commerce opportunities to developing nations as reasons it’s joining the Libra Association . “Much of the world’s financial infrastructure was not built to handle the scale and needs of internet commerce” Shopify wrties. Here are the most critical parts of its announcement:
“Our mission is to make commerce better for everyone and to do that, we spend a lot of our time thinking about how to make commerce better in parts of the world where money and banking could be far better . . . As a member of the Libra Association, we will work collectively to build a payment network that makes money easier to access and supports merchants and consumers everywhere . . . Our mission has always been to support the entrepreneurial journey of the more than one million merchants on our platform. That means advocating for transparent fees and easy access to capital, and ensuring the security and privacy of our merchants’ customer data. We want to create an infrastructure that empowers more entrepreneurs around the world.”
As part of the Libra Association, Shopify will become a validator node operator, gain one vote on the Libra Assocation council, and can earn dividends from interest earned on the Libra reserve in proportion to its investment, which is $10 million at a minimum.
The Libra Association had lost much of its ecommerce expertise when a string of members abandoned the project in October amidst regulatory scrutiny. That included traditional payment processors like Visa and Mastercard, online processors like Stripe and PayPal, and marketplaces like eBay. That threw into question whether Libra would have the right partners to make the cryptocurrency accepted in enough places to be useful to people.
Shopify’s CEO Tobi Lutke tweeted that “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.”
Operating an ecommerce store can be difficult or impossible without a traditional bank account that can be tough to attain in some developing countries. Libra could allow these merchants to establish a Libra Wallet where payments are sent instantly, without steep credit card fees, and in theory could be cashed out at local brick-and-mortar establishments or ATMs for local fiat currency.
Shopify’s credit card readers
But for any of that to happen, the Libra Association will have to convince the US government, the EU, and more that it won’t help terrorists launder money, hurt people’s privacy, or weaken nations’ power in the global financial system.
“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” writes Dante Disparte, the Libra Association’s Head of Policy and Communications. “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.”
Here’s the full list of Libra Association members:
Facebook’s Calibra, 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, Mercy Corps, Women’s World Banking
Vodafone, Visa, Mastercard, Stripe, PayPal, Mercado Pago, Bookings Holdings, eBay