Payment giants, Mastercard, Visa, Stripe and e-commerce company eBay have pulled out of the partnership with Facebook’s embattled cryptocurrency, Libra, according to Financial Times.
This development follows the withdrawal of PayPal from the Libra association.
The severance of partnerships by the payment companies drops the number of organisations left in the Libra association to nineteen with most of the companies pulling out citing regulatory uncertainties.
Visa’s spokesperson said the company was still evaluating factors but their decision rests on the satisfaction of regulatory expectations.
“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.”Spokesperson Visa
According to a statement released by eBay, the company expressed that it respects the Libra project but has opted to not move forward as a founding member.
Stripe severed its partnership with Libra but a company spokesperson explained they remain open to working with them at a later stage.
“Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage.”Spokesperson Stripe
Facebook’s Libra project has drawn heavy resistances from regulators and politicians, particularly in the US and France.
Financial regulators have shown considerable concerns over the risk Libra could pose. Its potential use for money laundering and stability being the leading concerns.
In response to these concerns and the departing companies, the Libra Association has said that Libra will remain resilient even if association members may grow and change over time.
“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.”Statement by Libra Association
Is Libra dead on Arrival?
Although Mastercard and Visa, Stripe, eBay and Paypal have withdrawn from Libra, David Marcus, Facebook’s executive in charge of the Libra project, cautions against losing faith in the project.
He explained that the exit of major firms was “liberating”, adding that pressure means you are doing something right
“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.”David Marcus, Facebook’s executive in charge of the Libra project
The intensifying international scrutiny on Libra may delay or even impede the launch of Libra.
However, Libra has announced that it will officially reveal its members at the inaugural Libra Association Council meeting which will hold on Monday, October 14, 2019.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!