PayPal, Visa and Mastercard are reportedly on the verge of quitting Facebook’s digital currency project called Libra, as the social media giant continues to stumble through regulatory and watchdog concerns.
According to the Financial Times, at Libra’s most recent meeting in Washington to discuss regulatory hostility to the project, PayPal was one of only 28 backers not to attend.
PayPal’s absence has sparked concern that the online money transfer company may be quitting the Libra project due to Facebook’s failure to address concerns over issues of the possibility of money laundering through the digital currency.
Visa and Mastercard were also reportedly reconsidering their interest in the project according to The Wall Street Journal.
In response to the article, current Vice President of Messaging Products at Facebook (formerly Vice President of PayPal), David Marcus, said in a tweet that he did not know of any plans for organisations to leave the project.
2) change of this magnitude is hard and requires courage + it will be a long journey. For Libra to succeed it needs committed members, and while I have no knowledge of specific organizations plans to not step up, commitment to the mission is more important than anything else;
— David Marcus (@davidmarcus) October 1, 2019
As national watchdogs, the European Commission and the US Federal Reserve continue placing immense scrutiny on Facebook and Libra, questions are now being asked over threats to financial stability and monetary sovereignty that the project may bring.
Representatives from Libra’s company backers are reportedly due to meet in Geneva on 14 October to review a charter for the Libra Association and appoint a board of directors.
However, the memo reviewed by The Wall Street Journal indicates that Facebook and Libra want official backing of the project from association members as currently, none have signed binding letters of intent.
The $10 million investment requested by Facebook from each member has not been transferred either.
“It’s important to understand the facts here and not any of us get out ahead of ourselves,” Visa Chief Executive Al Kelly said on the July company earnings conference call.
“No one has yet officially joined.”
Even Apple CEO Tim Cook reportedly had comments to make regarding the rise of digital currency, saying companies should not be trying to gain power by establishing competing currencies.
According to CNBC, when speaking to French daily newspaper Les Echos, Tim Cook said Apple would not follow suit on digital currencies, stating it should remain “in the hands of countries”.
