Six companies have deserted Facebook’s digital currency Libra as the project faces ongoing scrutiny from regulators and lawmakers.
Paypal was the first to exit last week, followed by Mastercard, Visa, Ebay, along with payment platforms Stripe and Mercado Pago.
The exodus leaves PayU as the only payment services partner left in the Libra Association.
Their exit comes as the project to create the first global digital-only currency is scrutinised, particularly in the US where there are calls to pause the project until regulations can be implemented. CEO Mark Zuckerberg has been called in to testify before US Congress next week to answer questions around Libra.
Following its departure, Visa said it will continue to evaluate its decision to re-join the Association, highlighting Libra’s ability to clear any future regulation as a determining factor.
“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,” a spokesperson says.
“Visa’s continued interest in Libra stems from our belief that well-regulated blockchain-based networks could extend the value of secure digital payments to a greater number of people and places, particularly in emerging and developing markets.”
A Mastercard spokesperson confirmed the company also pulled out of the Libra Association.
“We remain focused on our strategy and our own significant efforts to enable financial inclusion around the world,” they said.
“We believe there are potential benefits in such initiatives and will continue to monitor the Libra effort.”
Other companies also left the door open to re-join the project in the future.
“We highly respect the vision of the Libra Association; however, Ebay has made the decision to not move forward as a founding member,” a spokesperson for the company says.
“At this time, we are focused on rolling out eBay’s managed payments experience for our customers.”
The exodus came just days before the Association’s first convention on 14 October where it will establish each of the players’ role and responsibility.
Facebook, which is heading up the project, aims to launch the currency next year, by which time it hopes to have 100 members onboard.
Responding to the news, Libra co-creator David Marcus said he respects Visa and Mastercard’s decision to wait until there’s “regulatory clarity” for Libra to proceed.
I would caution against reading the fate of Libra into this update. Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.
— David Marcus (@davidmarcus) October 11, 2019
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