Today the Celo Foundation unveiled 50 members for its ‘Alliance for Prosperity’. Celo shares some similarities with Facebook’s Libra. It has a financial inclusion goal, offers a stablecoin and has several shared members and backers. But while the alliance is new, Celo pre-dates Libra.
Fairly or not, many have questioned Libra’s financial inclusion motivations, particularly former member Mastercard. But in the case of Celo, the aim has been central from an early stage. The World Economic Forum (WEF) plans to release a paper: “Financial inclusion, real or not.” WEF’s blockchain leader Sheila Warren is a social entrepreneur and has previously said positive things about Celo.
Celo’s members have a combined reach of 400 million people. Use cases being explored include remittances and payments, microlending, and making it easier to deliver humanitarian aid.
The organization has raised more than $36 million to date mainly through tokens, including $15 million from Andreessen Horowitz, which also backs Libra. Other shared members include Coinbase, Anchorage, BisonTrails and MercyCorps.
The stable digital currency will be the Celo Dollar, and the verifiers on the Proof of Stake blockchain will earn Celo Gold. Technically, the smart contracts are compatible with Ethereum, and it supports ERC20-like stable currencies. The platform is at the testnet stage.
Olaf Carlson-Wee, the founder of Poylychain Capital, recently compared Celo to other coins used for payments, Ripple and Stellar.
“Stellar and Ripple are both permissioned systems. While this allows these systems to facilitate low-cost payments that settle very quickly, the underlying unit of account in these payment systems is a volatile and speculative cryptocurrency,” asserted Carlson-Wee.
“Additionally, without the “open API” model we see in Ethereum, there is a limit to the sorts of financial logic developers can compose on top of Stellar and Ripple. This is why we see a rich ecosystem of smart contracts composing financial primitives on Ethereum.”
Carlson-Wee continued: “The more Stellar and Ripple are used for payments, it is unclear to me why that would drive value to the native coin of these systems. In Celo, the nodes that host the blockchain are permissionless, and there is a virtual machine that can interpret code, so anyone can compose arbitrarily complex financial logic.”
Meanwhile, with startups, timing is everything. One thing that Celo might run into, is the regulations coming down the line to address the perceived threat of Libra’s stablecoin.