Optimism can be contagious. A can-do attitude can rally the troops, get things done, spark innovation where once the status quo was, well, good enough.
Then there’s optimism that is, if not whistling past the graveyard, at least humming a few bars.
For the Libra Association, the Geneva confab is over, and Monday (Oct. 14) might have brought at least a partial sigh of relief. As reported, Facebook’s beleaguered cryptocurrency — which is being questioned by what seems a global tidal wave of regulators — managed to garner more than 20 backers. Each of those backers is slated to ante up $10 million to help launch the digital currency. While $210 million is a significant amount of money, Libra lost its most high-profile adherents when Visa, Mastercard, PayPal and others dropped out, and of course these are firms that are crucial to develop payments infrastructure, not to mention burnish credibility.
The consortium still aims to have at least 100 members by a still-targeted 2020 launch. That’s nearly a multiple of five times the current roster.
David Marcus, the co-creator of Facebook’s Libra cryptocurrency, told CNBC that the defections and the churn did not amount to a “tough week.” Hmm. As for the defectors, he told the news outlet, “I would rather have all of these companies come with us … It’s kind of odd that all of this is happening at the stage of this project, because it’s a project. It’s an idea. It’s a whitepaper. Nothing is operating yet,” he said regarding scrutiny from worldwide regulators. “It’s kind of sad in a way to see all the issues that we currently have with the current system.”
Marcus has said there are 180 potential members out of 1,500 entities that have indicated interest in joining up. We wonder if winnowing down the pool to a 12 percent potential acceptance rate speaks to exclusivity or if perhaps the interest is coming from firms who don’t really fit well or understand just what Libra is supposed to do.
The current issues and the current system cited by Marcus are still there to be grappled with, of course, spanning privacy and security and any number of central banks that are training their sights on issuing their own digital currencies. It was a rough week (or so) for Libra and the road still has its twists and turns. Optimism has its place in the world, but the true test of optimism is … the challenge of reality.
PayPal Across the Globe: Amid a $39 trillion mobile payments market in China, the market is opening to foreign players — notably PayPal, which now has a controlling stake (70 percent interest) in Guofubao Informational Tech, also known as GoPay. The latter form holds a payment business license in China. PayPal becomes the first foreign payment platform to be licensed in China.
Brexit Buyouts: Since the Brexit vote three years ago, there has been $60 billion in deal-making for U.K. tech companies — and where foreign companies were doing the buying. Data from Bloomberg notes there were 200 transactions last year.
FinTech in India: Financial services and mobile payments firm Paytm was rumored this week to be raising as much as $2 billion from a series of investors at an implied $15 billion valuation. There also was a $585 million USD equivalent investment round this month in the B2B eCommerce platform.
More Antitrust, with Amazon in Sight: In the U.K., the Competition and Markets Authority has decided to launch a formal investigation into Amazon’s $575 million funding round tied to Deliveroo.
Retail Sales Slump: After seven months of gains and then a slide in September, retail sales were down 30 basis points where analysts had expected a gain. It’s too early to tell whether it’s a blip or a trend, but uneven data from manufacturers and speculation about Fed rate cuts mean watchfulness about the trade war’s lingering effects, possibly on the consumer’s pocketbook.
From WeWork to Out of Work: The beleaguered startup’s failed IPO, CEO ouster and financial worries have some observers speculating about a collapse. WeWork reportedly has been prepping to lay off thousands of workers — as much as 13 percent of staff.