MasterCard, Visa, and Paypal Pull out of Libra: Is Facebook’s Digital Currency Imploding?
Facebook’s cryptocurrency project “Libra” started with grand ambitions: A currency for the unbanked and underbanked. A revolution of money. Proponents announced Libra might eventually replace sovereign currencies like the U.S. dollar or the euro.
It didn’t. And today, Libra’s future is stuck in a cloud of uncertainty. Not only are regulators and governments heavily resisting Facebook’s private currency, but recently, some of the most prominent founding members have withdrawn from the Libra Association, the organization that was supposed to govern the digital currency.
Namely, PayPal, Visa, Mastercard, eBay, Stripe, and Mercado Pago have departed from the Association – potentially a fatal blow to the project’s global ambitions. A Visa spokesperson said, “We will continue to evaluate, and our ultimate decision will be determined by many factors, including the Association’s ability to fully satisfy all requisite regulatory expectations.”The project will continue, but the future remains uncertain
Libra started with 28 founding members – today, 21 are left. At a meeting in Geneva in October, the remaining members signed onto the Libra Charter. Director-General Bertrand Perez said, “We now have a total guarantee of their involvement, so we have confidence in the project.”
David Marcus, the chief of the project, believes Visa and Mastercard will eventually return once there is “regulatory clarity.” He might be right, but the question is when there will be regulatory clarity and what that then means for the project’s future. Governments and regulators have made it clear that they won’t allow a private company to create a widely used currency that might threaten governments’ money monopoly.
For now, the project will continue, but much of the initial buzz is gone. With some of the most prominent members jumping ship, it will be more difficult for the remaining members to create a global payment network. We stay tuned on Exports News – stay tuned with us.