FinTech

Facebook’s Libra Stumbles as PayPal Quits Digital Currency Project…Visa, Mastercard Reviewing Involvement  

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Facebook’s Libra plans continue to stumble as PayPal quits the digital currency project, with Visa and Mastercard also reconsidering their involvement.

In a statement late on Friday, PayPal says it 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”.

“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 news comes a day after the Financial Times reported that PayPal was the only one of Libra’s 28 backers not to attend a Thursday meeting in Washington to discuss how to deal with regulatory hostility to the project.

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Citing sources, the FT said PayPal is on the verge of quitting Libra amid concerns about the lack of work done by Facebook to address regulators’ concerns over issues such as money laundering.

Earlier in the week, the Wall Street Journal reported that Visa and Mastercard are considering their involvement in the project over similar worries about the regulatory and political response.

Monese

Competition watchdogs at the European Commission have already begun probing potential anti-trust issues relating to Libra, while the US Federal Reserve and other central banks have expressed concerns over the threat posed to financial stability and monetary sovereignty.

Responding to the WSJ story, David Marcus, the current Facebook and former PayPal exec who is chaperoning the project at the social media giant, said in a tweet “I have no knowledge of specific organizations plans to not step up”.

In a series of tweets, Marcus disputed some of the claims in the WSJ report but acknowledged that “change of this magnitude is hard and requires courage + it will be a long journey”.