Facebook’s libra cryptocurrency coalition is falling apart as eBay, Visa, Mastercard and Stripe jump ship
Facebook’s libra cryptocurrency coalition is falling apart as
eBay, Visa, Mastercard and Stripe jump ship
KEY
POINTS
- EBay, Visa, Mastercard and Stripe
announced Friday they will no longer be part of Facebook’s libra
cryptocurrency project.
- The news comes one week after
PayPal announced its withdrawal as government regulators continue to
scrutinize the plans.
- Facebook CEO Mark Zuckerberg is set to testify on the currency at an Oct. 23 hearing before the House Financial Services Committee.
EBay, Stripe, Mastercard and Visa are all dropping out of Facebook’s libra cryptocurrency project, the companies announced Friday. The news comes one week after PayPal announced its withdrawal as government regulators continue to scrutinize the plans.
In statements following the news, the companies
said they respect and see potential in the project, but have chosen to focus on
other efforts. A Stripe spokesperson said in a statement that the company “is
supportive of projects that aim to make online commerce more accessible for
people around the world.” Stripe will “remain open to working with the Libra
Association at a later stage,” the spokesperson said.
A Visa spokesperson said the company “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. 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.”
The original coalition of 28 corporate backers
of the libra cryptocurrency seems to be dwindling as lawmakers continue to
question how it will impact sovereign currencies and how the project’s leaders
can ensure consumers’ protection. Mercadopago and PayU are now the only two
payments companies continuing to back the cryptocurrency as of Friday
afternoon. Original backers Uber and Lyft told CNBC there has been no change
to their involvement in the project.
The backers abandoning the project may have
found safety in numbers after PayPal announced its exit last week. News that
eBay, Stripe and Mastercard were each dropping out quickly followed one another
Friday afternoon, indicating all three had likely been thinking about leaving
during the same period. The decisions come ahead of a planned Libra Association
Council meeting on Oct. 14. A week later, libra’s cryptocurrency project will
take center stage in front of U.S. lawmakers once again when Facebook CEO Mark
Zuckerberg testifies in front of the House Financial Services Committee later
this month.
David Marcus, who leads the libra project and
was previously the president of PayPal, weighed in on Twitter hours after the
announcements. He cautioned “against reading the fate of Libra into this
update.”
Special thanks to @Visa
and @Mastercard
for sticking it out until the 11th hour. The pressure has been intense
(understatement), and I respect their decision to wait until there’s regulatory
clarity for @Libra_ to proceed, vs. the invoked
threats (by many) on their biz.
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.
Marcus testified before
the committee in July. At the time, representatives including Chairwoman Maxine
Waters, D-Calif., had asked Marcus whether Facebook would postpone its plans
until the necessary regulations were in place. Marcus did not give an
affirmative answer, according to Waters’ judgement. She said his answer “was
not a commitment.”
The Libra Association, the nonprofit in charge
of managing the cryptocurrency, said Friday afternoon it is still looking to
move forward.
In a statement, policy and communication head
Dante Disparte said, “We are focused on moving forward and continuing to build
a strong association of some of the world’s leading enterprises, social impact
organizations and other stakeholders to achieve a safe, transparent, and
consumer-friendly implementation of a global payment system that breaks down
financial barriers for billions of people. We look forward to the inaugural
Libra Association Council meeting in just 3 days and announcing the initial
members of the Libra Association.”
Facebook declined to comment.
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