Following the departure of PayPal from Facebook’s Libra project—a cryptocurrency that promises to “reinvent money” and “transform the global economy”—a new wave of departures has rocked the platform as eBay, Stripe, Visa, and Mastercard have all announced that they are abandoning ship.
This serves as a massive blow to Facebook now that five of Libra’s 28 original founding members have dropped out just days before the Libra Association is scheduled to meet with its partners and sign a charter agreement next week in Geneva.
Each of the companies released statements on the matter echoing similar sentiments, generally espousing that while they are supportive of new ideas to improve commerce, they have decided to drop their initial support for Libra.
Visa’s statement per CNBC went even further saying “[Visa] will continue to evaluate and our ultimate decision will be determined by a number of factors, including the [Libra] 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 concern about Libra meeting regulatory guidelines is especially pertinent as Facebook founder Mark Zuckerberg is set to testify in front of the U.S. House Committee on Financial Services on October 24.
Now that PayPal, Stripe, Visa, and Mastercard have left the Libra Association, there are only two remaining payment partners in Libra’s stable—Mercado Pago and PayU—neither of which have major footprints in the U.S.
And with so many big names having recently pulled back their support for Libra, it wouldn’t be a surprise if even more partners caught a case of cold feet and decided to leave as well. Additionally, big established institutions working with Facebook on the cryptocurrency has been a key factor in its efforts to give the project legitimacy and assuage any fears based on Facebook’s sketchy reputation.
However, it seems the Libra Association remains undeterred, with a statement from the company’s head of communication Dante Disparte saying: “We are focused on moving forward and continuing to build a strong association of some of the world’s leading enterprises, social impact organisations 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.”
OK, well good luck with that.