It seems Facebook’s ambitious digital currency project Libra is witnessing an extremely rough patch. Yesterday, on October 12, 2019, the group behind the Libra project lost another five partners in the form of Mastercard, Visa, Stripe, eBay, and Mercado Pago, resulting in yet another huge setback.
We already know that PayPal, the global online payments giant, had backed out of the project only in the previous week. The decision of these major global companies leaving the Libra Association has come in as the project continues to attract regulatory concerns from authorities around the world.
For those who are unaware, Stripe is an American tech firm offering online payment processing for internet businesses, Mercado Pago is a Latin American payments entity, eBay is an e-commerce giant, while Visa and Mastercard are both prominent multinational financial services companies.
With five of such major companies opting out of the Libra Group, the project is left without any big payments firm as its member. As a result, the project doesn’t have an international player to resort to for helping users convert their currencies into Libra and facilitating transactions.
Visa, in its official statement, stated that at this time, they have decided to quit the Libra Association. Continuing further, the firm said that they would keep evaluating and make their final decision based on several factors that include the Association’s capability of satisfying all the necessary regulatory expectations fully.
eBay also released a statement saying although they respect the Association’s vision, they have decided to step down as one of its founding members.
At present, the Libra project primarily consists of telecommunications, venture capital, non-profit entities, as well as technology and blockchain companies as its Association members. This list of companies includes Vodafone, Spotify, Uber, and Lyft.
On this recent unpleasant development, David Marcus who heads the project for Facebook expressed that though it is not a piece of great news, it would be wrong to read Libra’s fate from this update.
Libra’s communication and policy head, Dante Disparte, stated that in spite of the setbacks, Libra would move forward with its plans of chartering the association formally in 3 days.
It is important to note that ever since its announcement, Libra has run into trouble from regulators across the globe who are raising concerns over the project citing money laundering, privacy issues, financial stability, and consumer protection worries.
On October 23, 2019, Mark Zuckerberg, Facebook’s head, will be discussing the project at his scheduled testimony before the United States House Financial Services Committee.