Global payment processor PayPal has officially quit the Libra Association – the governing body of all partner companies involved in Facebook’s Libra project.
According to Reuters, PayPal missed the meeting of the Libra association held last Thursday; with a spokesperson revealing that the company had withdrawn from the Libra cryptocurrency project. His statement reads:
“We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future. Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.”
The spokesperson further revealed reasons for quitting as he remarks:
“It doesn’t seem that there was a lot of pre-work done with regulators. Payment companies don’t want that (regulatory scrutiny) to bleed into their business.”
– PayPal
In response, the Libra Association says it is aware of the challenges in its attempts to ‘reconfigure’ the financial system.
“The type of change that will reconfigure the financial system to be tilted towards people, not the institutions serving them, will be hard. Commitment to that mission is more important to us than anything else. We’re better off knowing about this lack of commitment now, rather than later”, Libra Association said in a statement.
PayPal’s withdrawal has however not dampened hopes of the coin launch as the Libra association revealed on Twitter details of other over 1,500 companies interested in the project.
PayPal’s decison as highlighted above is hinged on the current opposition to the Libra Coin by regulators and government institutions. Arguments made against the Libra are fixed on Facebook’s past scandal on data privacy and consumer protection; one which regulators believe will pose a threat if it’s given the go ahead to launch..
While Facebook assures of best practices before launching the Libra in 2020; the backlash by regulators and EU nations has affected the enthusiasm of the 28 Libra Association members.
Most members look to avoid a hostile relationship with regulators; one which association with Facebook’s Libra coin may bring. Members such as Visa, MasterCard, and Stripe have all been rumoured to be considering an exit; though all have denied these claims.
However, what is certain at this time is that for the Libra to launch, Facebook must satisfy regulatory concerns.
See all current members of the Libra Association here.
