Banking News

Libra adds non-profit Heifer International after unveiling changes

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Yesterday, non-profit Heifer International announced it is joining the Libra Association to increase credit availability to small scale farmers. Heifer is the first member to join the Association after it published its new whitepaper, which reflects changes in several Libra features. 

Globally, around 2.5 billion people rely on agricultural production for their livelihoods, and a majority of them are small-scale farmers. Heifer International is helping these farmers through training and assistance to improve their income, adopt sustainable agricultural practices, and increase food security.

The Libra Association aims to create a global blockchain-based payments network and digital currency that promotes financial inclusion and can integrate with existing economic systems. 

Heifer International believes Libra could increase access to finance for farmers. 

“We believe the Libra project has the potential to deliver a lower-cost, more accessible and more connected global financial system. One that will enable people that currently do not have access to the financial system to be connected to a more reliable and cost-effective platform,” said Heifer in its statement

The World Bank estimates that there are 2 billion unbanked adults across the globe. With small scale farmers, the problem is the unavailability of credit facilities, which results in them borrowing money from local lenders who charge high-interest rates. Furthermore, family members are often forced to work far away and remit money back home, which can be expensive.

Heifer International wants to leverage mobile phones and the internet to provide a better financial ecosystem to help such marginalized farmers and improve global food security.

Meanwhile, Libra has received a lot of flak for its permissionless structure, raising concerns of money laundering. Financial regulators across the globe are wary of Facebook’s cryptocurrency as they believe it could destabilize the economy and monetary systems. 

In the past few months, the Association saw several of its high-profile members leaving the organization. Visa, Mastercard, eBay, and Paypal withdrew from the project likely due to regulatory concerns. The Association now has 23 members, including Heifer International. 

In the recent whitepaper, Libra says it’s no longer aiming for a permissionless network, which would allow anyone to participate. Additionally, it will now support stablecoins and its Libra coin will be backed by a basket of stablecoins instead of sovereign currencies. But this was not enough to convince U.S. Congresswoman Sylvia Garcia, who is pushing to classify Libra as a security.