Singapore’s Temasek throws weight behind Facebook’s Libra

Singapore’s Temasek, one of the world’s biggest institutional investors, has thrown its support behind the Facebook-led digital currency Libra in a development that could help breathe new life into the under-fire project. 

The state-backed investment company’s inclusion in the Libra Association, announced late on Thursday, comes after the association last year lost a number of high-profile members over concerns it could threaten the financial system, as well as privacy and money-laundering fears. 

Temasek’s participation makes it the first Asia-based member as well as the first state-backed investor to become involved in the project. Singapore is recognised as a financial technology hub in Asia and the government has encouraged and supported crypto-related technologies and financial technology innovation. 

Its membership of the Libra Association will allow it “to contribute towards a regulated global network for cost-effective retail payments”, Chia Song Hwee, Temasek’s deputy chief executive said in a statement. 

The news comes just weeks after Libra announced plans to shrink the scope of its original vision in order to appease global regulators, following concerns the network could become a hotbed for money laundering and other illicit activities. 

Several high-profile members — including Visa, Mastercard and PayPal — pulled out of the project last year over such worries, while Facebook chief executive Mark Zuckerberg was grilled by Congress over the plans. 

The move by Temasek, a prolific technology investor, came despite cautious comments regarding the project from the head of Singapore’s de facto central bank last year.

Ravi Menon, managing director of the Monetary Authority of Singapore, said in September that Libra posed global financial risks that needed to be addressed by regulators. 

But the association has said it will now monitor its network — and the groups that join it — more closely, forgoing initial plans for a more “decentralised” system that developers could join without vetting.

Many regulatory challenges were highlighted by central banks around the world when Libra was first announced, said Zennon Kapron, director of Asia-focused research group Kapronasia.

“The new version of the Libra white paper aims to correct a lot of those issues,” he said, adding it was unlikely that Temasek would join a project the MAS did not approve of. “With Temasek being the first Asian member, it could help cement Singapore as a fintech hub if the project is successful.”

In addition to Temasek, San Francisco-based cryptocurrency investor Paradigm and private equity group Slow Ventures also joined the organisation, taking the total to 27 members. Existing members include US venture capital firm Andreessen Horowitz, Swedish music streaming service Spotify, ecommerce platform Shopify, as well as US ride-hailing companies Uber and Lyft. 

Earlier this month, the association also announced the appointment of sanctions heavyweight Stuart Levey, HSBC’s chief legal officer, as its first independent chief executive from July. A former US under-secretary for terrorism and financial intelligence, he will be tasked with getting the green light from US and other watchdogs for the project to proceed. 

Additional reporting by Stefania Palma in Singapore

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