Banking News

Payment firm Checkout.com joins Libra

libra

Today digital payments firm Checkout.com announced it was joining the Libra Association, the digital currency and payments network founded by Facebook. This is the second addition in a week after non-profit Heifer International joined last week.

In a blog post, Checkout.com said the purpose of joining is to optimize the payments of merchants and improve efficiencies. 

The London based firm provides payment processing to clients including Samsung, Getty Images, Patreon and Virgin Active. Last May, it raised a $230 million Series A at a $2 billion valuation funded by Insight Partners, DST Global and GIC, the Singapore sovereign wealth fund, amongst others.

Ironically, Checkout.com says one of its attractions is to be part of a regulated system which “protects the ecosystem from systemic abuses.” Just seven months ago, Stripe along with Visa, Mastercard and others dropped out of Libra because of the regulatory pushback.

And that resistance is ongoing. Two weeks ago, Libra published a new version of its whitepaper, which showed numerous compromises to satisfy regulators. But within hours, a U.S. congresswoman said she was continuing to pursue legislation to have all stablecoins treated as securities

Separately, a Federal Reserve Counsel wrote on Ledger Insights about current legislation that relates to stablecoins. Based on that, our interpretation is that Libras’ coins will likely be securities, even the additional single currency ones now proposed. That’s because government securities will partly back them. And packaging securities gives you a security.

And last week, Facebook made a massive $5.7 billion investment into Indian telecoms firm¬†Reliance Jio. We think that at the very least, Libra or Facebook’s Calibra wallet could be part of the motivation given India is the biggest market for Facebook and subsidiary WhatsApp. And India has a big appetite for digital currency.