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Facebook's Libra Cryptocurrency Doomed as Major Backers Pull Out

MasterCard, Visa and eBay join Stripe and PayPal in dropping global currency project

 on 12th October 2019 @ 12.00pm
mark zuckerberg s  libra  cryptocurrency project looks doomed after key backers have pulled out © press
Mark Zuckerberg's 'Libra' cryptocurrency project looks doomed after key backers have pulled out

Facebook's controversial "Libra" global cryptocurrency looks doomed after major firms backing the project have pulled out.

Libra has lost some of the biggest companies behind the project as MasterCard, Visa, eBay, Stripe and Latin American payments company Mercado Pago all announced on Friday night they were joining PayPal in leaving the foundation behind the global digital currency.

Mark Zuckerberg's attempt to rival both Bitcoin and the US dollar as a global default currency has been dogged with controversy.

Critics have voiced mounting concerns over the level of power Facebook would have over the world's population by having control over global finances.

Governments, particularly authorities in France, Germany, and the United States, have been voicing major concerns over regulation and security.

Visa released a statement confirming they had pulled out, adding: "We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the association's ability to fully satisfy all requisite regulatory expectations."

critics are concerned about the level of control libra could give facebook over the world s population © press
Critics are concerned about the level of control Libra could give Facebook over the world's population

It comes just days after American payments processing firm PayPal pulled out.

In a statement, David Marcus, the head of Facebook's project, said people should not be "reading the fate of Libra into this update."

Marcus did admit, however, that it was "not great news in the short-term."

The Libra Association now has no major payments companies as members, meaning it cannot count on a global player to help people turn their currency into Libra and facilitate transactions.

The remaining members are mainly venture capital, telecommunications, blockchain and tech companies.

But the project will press on, according to Dante Disparte, Libra's head of policy and communication.

He said: "We are focused on moving forward and continuing to build a strong association of some of the world's leading enterprises, social impact organizations and other stakeholders.

"Although the makeup of the Association members may grow and change over time, the design principle of Libra's governance and technology, along with the open nature of this project ensures the Libra payment network will remain resilient."

facebook s libra has been dogged with controversy since it was announced in june © press
Facebook's Libra has been dogged with controversy since it was announced in June

Facebook announced in June that it was establishing the group, with the aim of launching the digital currency in June 2020 but it quickly ran into regulatory issues.

France and Germany have pledged to block Libra from operating in Europe and backed the development of a public cryptocurrency instead.

At its unveiling, Facebook said it wanted to allow people to make payments with the currency via its own apps, as well as on messaging service WhatsApp, while partner firms would also be able to accept Libra for transactions.

Paying, it said, would be as easy as texting.

But concerns have grown over how people's money and data will be protected, as well as over the potential volatility of the currency.

Facebook chief executive Mark Zuckerberg is expected to discuss the project when he testifies before the US House financial services committee on 23 October.

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