Facebook’s ambitious financial inclusion project, Libra, continues marching forward in spite of mountainous regulatory obstacles, but key members of the Libra Association are having doubts and dropping out. Paypal has now reportedly left the group due to regulatory concerns. Libra representative Dante Disparte has indirectly criticized the move, noting the required “boldness and fortitude to take on an endeavor as ambitious as Libra” and presumably Paypal’s noticeable lack thereof. Visa and Mastercard are now said to be uncertain about the Libra connection as well, raising further questions about the ultimate feasibility of the project.
Also Read: European Countries Step Up Response to Facebook’s Libra
Paypal Compounds Libra’s Battles
It’s not often that a project faces so many major league struggles before getting off the ground, but Mark Zuckerberg and Libra have made significant waves and received real backlash from the upper echelon of global financial and regulatory circles already. Whether it’s letters from the U.S. House of Representatives calling for a moratorium, flak from Donald Trump and U.S. lawmakers, or outright opposition from France and Germany, the project has had a tough row to hoe, and it’s not even launched yet.
The last thing needed now, presumably, would be for major members of the association to start dropping out. That seems to be just what’s happening though, according to reported statements issued by Paypal representatives who maintain the company has decided “to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations.”
The Libra Association’s head of policy and communications, Dante Disparte, reportedly told media outlet the Verge:
This journey to build a generational payment network like the Libra project is not an easy path. We recognize that change is hard, and that each organization that started this journey will have to make its own assessment of risks and rewards of being committed to seeing through the change that Libra promises.
The representative went on to affirm that the upcoming Libra council meeting is still set for October 14 in Geneva.
Mastercard and Visa May Also Drop Out
It’s been reported that others including Visa and Mastercard may be leaving the Libra Association as well. In addition, Ebay’s deep historic corporate ties to Paypal have some questioning how long the e-commerce and online auction giant may remain. Before feeling too sorry for Libra, though, it’s important to remember who the organization is. The Libra Association is a veritable who’s who of finance and tech mega clout, all teamed up ostensibly for the same purpose: to make the proposed Libra cryptocurrency a reality. With an estimated 2.41 billion monthly active users, Facebook is by no means hurting for support. Other companies on the roster are similarly more-than-well-established players in the tech, blockchain and finance industries, and as such the project is far from foiled.
Still, Paypal’s bold exit combined with regulatory backlash from governments worldwide does not bode well. Not to mention many in the crypto space attacking the proposed currency for its centralized nature and connection to the habitually privacy-invasive Facebook, Inc. As much as the new Zuck bucks claim to be an answer for financial inclusion and support for the unbanked worldwide, a confluence of corporate and government powers seems to ultimately hold the fate of the token in its hands.
What are your thoughts on Paypal’s decision to leave the Libra Association? Let us know in the comments section below.
Image credits: Shutterstock.
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