Andreessen Horowitz: How Facebook’s Libra Cryptocurrency Will Be Governed
Everyone is talking about Libra, Facebook’s big splash in the cryptocurrency space, announced on Tuesday. But on Wednesday at Fortune’s inaugural Brainstorm Finance conference in Montauk, N.Y., Venture capital firm Andreessen Horowitz made one thing clear: It will have just as much power as Facebook in overseeing the governance of the new digital currency.
Kathryn Haun, general partner at Andreessen, told the Brainstorm Finance audience that a consortium of 28 founding members, called the Libra Association, will spend the next few months debating decisions around how the new digital currency will be overseen. And all of those members will have a seat at the table in determining the direction.
“One of they key factors in our decision to join was that we would in fact have—and all members would have—an equal vote,” Haun said.
Facebook is developing a new digital currency designed to work with the company’s family of apps, though it will be available for use beyond that. Company executives expect the currency to debut in mid-2020. Libra is expected to have lower volatility than some of the pioneering cryptocurrencies like Bitcoin.
Along with Andreessen, PayPal, Coinbase, Visa, and MasterCard are a part of the Libra Association, tasked with mapping out oversight for the currency. Haun, a former Justice Department prosecutor, said one of the challenges the association will have is pushing the project forward in a way that fosters innovation but also protects consumers.
For example, if a court requests that an identity be traced, is that something Libra should be able to do?
“This is a very important conversation,” said Haun, who set up the U.S. government’s first cryptocurrency task force in 2012. “There will be debates because there are very different points of view, even now at the Libra Association.”
Once the association can have those debates and vote—with equal power—on the resolutions, they can then start drafting the governance documents. Haun expects that those documents to be shared with the public.
How effective the association will be as a governing body is yet to be determined, Haun said. But she reiterated that with non-governmental organizations, financial organizations, and Facebook all equally a part of the association, a diversity of thoughts and interests will be well represented.
“I think of it as a constitutional convention,” she said. “You have all these different states coming in trying to form this union.”
More must-read stories from Fortune Brainstorm Finance:
—Brainstorm Finance 2019: Watch the livestream of the inaugural conference
—Bank of America CEO: “We want a cashless society”
—Tala CEO: How Facebook’s Libra cryptocurrency can help companies scale
—Charles Schwab CEO: Actually, we’re killing it with millennials
—Listen to our new audio briefing, Fortune 500 Daily
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