The difficulties of Facebook seem to be multiplying on every coming day.
Strong ripples across the industry were observed on Friday when PayPal, the first firm to back digital currency project of Facebook, has officially announced its detachment from the project.
However, the announcement did not specify any particular reason behind the decision.
An email sent by PayPal spokesperson Amanda Coffee, revealed,
PayPal has made the decision to forgo further participation in the Libra Association at the time and continue to focus on advancing our existing mission and business priorities.
Interestingly, PayPal was the first firm to enter the Libra association among the 28 others. However, it also has marked itself as the first one to exit from the project.
Responding the PayPal’s departure, the Libra Association stated that it is aware of the challenges to build a generational financial system would be tough to achieve.
It further stated,
Commitment to that mission is more important to us than anything else. We are better off knowing this lack of commitment now.
Why is the Libra Project witnessing global disdain?
Since the white paper release of Libra in June 2019 in Geneva, Facebook received an initial massive response from various big corporates, including Visa, MasterCard, PayPal Uber, Merci Corps, and many more. However, over time, the project seems to be dwindling for several reasons.
The very first concern raised by several governments across the globe is about the possible dominance of Libra on their local currencies. E.g., China, European nations, the UK and many more
European nations are mulling Libra as a threat to their financial stability, financial security, and state sovereignty and also for their citizens’ data security. They also are strictly scrutinizing the possibilities of financial fraud.
Whereas, China is in the process of developing its cryptocurrency to eliminate any dominance of Libra on its economy.
Secondly, Facebook’s currency might have the centralized authority of the currency as it has access to data of millions of its users on microblogging sites Facebook, WhatsApp, etc.
Facebook has faced disapproval from its own country, where the US central bank and even President Trump have expressed concern over the national security issue. Other advanced economies have asked Facebook to address regulatory concerns.
Libra Association’s Standpoint
The Libra association has scheduled its first governing council meeting on October 14, 2019. Libra expressed its future plans on Twitter, which will have the inclusion of 1500 more associations.