After PayPal, several Other members of the Libra Association including MasterCard, Visa, eBay, Stripe, and Mercado Pago, have also abandoned Facebook’s plans for creating the distributed, global cryptocurrency Libra.
This serious blow from these payment processor giants came as the Libra crypto project attracted fierce criticism from global regulators and lawmakers, and made industry experts raise the question regarding the existence of the project.
These withdrawals leave Libra with no major US payment processor which could become a serious hurdle for Facebook’s cryptocurrency aspirations. A week before, PayPal was the first to leave the Libra Association, the group that will oversee Facebook’s digital currency project.
These firms left the project three days before the first official meeting of the Libra Council Members, scheduled for October 14th in Geneva, in which they were supposed to sign a charter agreement. After the gathering and the charter is signed, the final list of official partners will go on public, Libra Association’s spokeswoman said on Friday.
The Libra Association spokeswoman released another statement, saying:
“The group was focused on moving forward and continuing to build a strong association as it worked to create a safe, transparent, and consumer-friendly implementation of a global payment system that breaks down financial barriers for billions of people.”
Michael Pachter, an analyst for Wedbush Securities, told Bloomberg TV that the project’s future is uncertain until some financial institutes or payment processor firms step in. “I don’t think Facebook can do this by itself,” he added.
Facebook’s Libra has been bashed by regulators and politicians around the world, and was even asked to cease the development of Libra. Some fear that Libra may take over the U.S. dollar to become a global currency while others are worried that it could be used for illegal money laundering or trafficking schemes.
Visa, MasterCard, and Stripe have also been warned by two U.S. Senators, Sherrod Brown of Ohio and Brian Schatz of Hawaii telling that the Libra cryptocurrency poses a risk to the monetary system and they should reconsider their involvement in the project. Spokespersons from all of these firms have made several statements, explaining why they are leaving the project amid its development.
A Visa spokesperson stated:
“We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations.”
MasterCard, eBay, and Stripe released similar statements, saying that they appreciate the Libra Project and will follow its progress; however, they couldn’t be a part of it at this time.
