Economy

Facebook's Libra project falling apart as more big partners pull out

Facebook's Libra project falling apart as more big partners pull out”

"We appreciate their support for the goals and mission of the Libra project", a spokesperson for the Libra Association said.

Why it matters: Facebook's Libra cryptocurrency was dealt a major blow on Friday when several backers joined PayPal in withdrawing their support.

Speaking to CoinDesk, a Mastercard representative confirmed that it has pulled off the association.

The association, whose remaining 22 members include ride-hailing firms Uber and Lyft, also consists of non-profit organisations, venture capital groups and blockchain firms.

South African portal TechCentral cited Naspers CEO Bob van Dijk as saying the company remains a committed member of the Libra Association via its PayU subsidiary as what attracted it is still valid. The outfit also touted the number of potential members that could fill the exiting partners' shoes, noting that about 180 entities met the initial membership requirements.

Facebook has faced criticism since the summer when it unveiled plans to create a separate, private currency system to allow users to make cross-border payments more easily. Concerns over how Libra would handle money laundering, financial stability, and consumer protection have been voiced. It was a rather unexpected announcement and what was even more suprising the number of companies Facebook had tied up.

Responding to the news, Libra co-creator David Marcus said he respects Visa and Mastercard's decision to wait until there's "regulatory clarity" for Libra to proceed. Katie Haun with Andreessen Horowitz, one of the VC firms that invested in Facebook before it went public, was elected to the board as well. That committee is chaired by Rep. Maxine Waters, D-Calif., who has been an ardent critic of Libra from its onset. The Verge reports that Visa, Mastercard and Stripe all got letters from a couple of US Senators last week, warning them of severe regulatory con sequences if they continue with Libra.

The latest withdrawals followed the departure of PayPal Holdings Inc. from the Libra Association earlier this month.

In response to mounting concerns, Facebook's chief executive Mark Zuckerberg has been called to appear before a congressional panel on 23 October to discuss Libra, and likely other issues involving his firm.



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