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Mastercard, Visa, eBay, Stripe and Mercado Pago have all pulled out of the Facebook-led Libra Association following PayPal, which pulled its own support of the project earlier this week.
Recently we reported about how PayPal, one of the founding members of the Libra Association abandoned the whole project. However, it seems it wasn’t the only one. Just for a reminder, there were previously 28 members of the association, but it seems that they couldn’t handle the issues Libra is currently facing, most especially the problems surrounding regulatory support from relevant authorities. Now Mastercard, Visa, eBay, and payments firm Stripe have decided not to participate in Facebook’s castellated cryptocurrency project, Libra.
This step represents a huge “no-go” to the plans this social network had.
The project has been under rigorous investigation by the regulators and the US Government as well. On 23 October, Facebook’s CEO Mark Zuckerberg will show up before the House Committee on Financial Services to try to clarify all things surrounding Libra and its planned uprise. When in July CEO of Libra, David Marcus testified in front of the senate, some of its key concerns wee money laundering, financing terrorists, etc.
Senator Pat Toomey, the Pennsylvania Republican, asked then Marcus whether Facebook ever intends to seek users’ consent to monetize their financial data, the way the company does with other user data.
These reasons were obviously enough for most of the companies to ‘chicken out’. One of them is also Mercado Pago, a payments company that does most of its business on the territory of Latin America.
So now we have the situation where the six payments-related firms that were once the biggest supporters, now decided to back off. Only PayU stayed for now.
On the other hand, in the official statement released on Friday, eBay said it “respected” the Libra project. They wrote:
“However, eBay has made the decision to not move forward as a founding member. At this time, we are focused on rolling out eBay’s managed payments experience for our customers.”
A spokesperson for Stripe said the firm also supports the Libra’s focus on making global payments easier. They commented:
“Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage.”
From Visa they said:
“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.”
The Libra Association wrote:
“We appreciate their support for the goals and mission of the Libra project. 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. We look forward to the inaugural Libra Association Council meeting in just 3 days and announcing the initial members of the Libra Association.”
David Marcus said that he would “caution against reading the fate of Libra into this update.” He noted:
“Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.”