PayPal Drops Support For Facebook’s Libra Cryptocurrency Scheme

PayPal Drops Support For Facebook’s Libra Cryptocurrency Scheme

A few days after the Wall Street Journal reported that a few corporate supporters of Facebook’s cryptocurrency were considering bowing out of its so-called “crypto mafia”, PayPal became the first to do so Friday, announcing that it will no longer participate in the Libra Association.

“PayPal has made the decision to forgo further participation in the Libra Association at this time,” reads a company statement provided to Gizmodo. “We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future.” 

Along with other huge names like Uber, Spotify, Visa, and Mastercard, PayPal, an international online payment system, was primed to be a founding member of the regulatory body that would oversee Facebook’s planned cryptocurrency-powered global payment network. However, even with the association’s first meeting just weeks away, a recent Journal report revealed there’s been little concrete support from the 28 groups involved. As of this week, not a single one had committed to the project beyond a non-binding referendum nor paid the $US10 ($15) million investment Facebook requested, according to the Journal.

It’s currently unsure how PayPal’s announcement shakes up the association’s plans or Libra’s planned 2020 debut moving forward; the group’s head of policy and communications, Dante Disparte, doesn’t mention it in their statement provided to Gizmodo, preferring instead to focus on the “boldness” and “fortitude” required of its supporters in this “generational opportunity”, which makes Libra sound more like a Star Trek expedition than a cryptocurrency scheme.

“We’re better off knowing about this lack of commitment now, rather than later,” writes Disparte of PayPal’s decision.

You can read the statement in full below:

It requires a certain boldness and fortitude to take on an endeavour as ambitious as Libra – a generational opportunity to get things right and improve financial inclusion. The journey will be long and challenging. 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.

Facebook’s endured plenty of heat since announcing Libra back in June, making PayPal’s withdrawal feel like the first inevitable crack in an already shaky foundation. Plans for Facebook’s s cryptocurrency have prompted scrutiny from sceptical banking and antitrust officials in India, China, the EU, and multiple branches of the U.S. government. And the “crypto mafia” of corporate and non-profit Libra supporters have been purportedly showing signs of cold feet for months, worrying that moving forward with the project could put their organisations under a similar regulatory microscope from governments worldwide. According to the Journal’s sources, Visa, Mastercard, Stripe, and PayPal itself have already fielded requests from the Department of Justice to hand over a “complete overview of their money-laundering compliance programs and how Libra will fit into them.”

Outside of its cryptocurrency development, Facebook is also reportedly facing a DOJ antitrust probe in addition to similar investigations from the Federal Trade Commission and multiple states. And he’s already promised to go toe-to-toe with Senator Elizabeth Warren or any other 2020 presidential candidate that tries to break up big tech companies while in office. Which all seems to suggest PayPal might have the right idea in giving Facebook a wide berth.