US-based PayPal Holdings Inc. has said it’s ditching Facebook’s project to create the Libra cryptocurrency. However, the Libra Association says it is better to know who’s not fully committed to its cause.
“PayPal has made the decision to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations,” CNBC channel reported, quoting a statement from the payments processor.
PayPal said, however, that it would remain “supportive of Libra’s aspirations.” The move made PayPal the first member to exit the Geneva-based Libra Association, the entity managing the Facebook-led project to create a global digital currency.
Following PayPal’s announcement, the Libra Association responded coolly that it prefers to know which of the group’s members is not fully committed to its cause from the start.
“The type of change that will reconfigure the financial system to be tilted towards people, not the institutions serving them, will be hard. Commitment to that mission is more important to us than anything else. We’re better off knowing about this lack of commitment now, rather than later,” the group said in a statement, as cited by Reuters.
The group said in a tweet that it will hold its first Libra Council meeting in 10 days and will be sharing updates following that, including “details of the 1,500 entities that have indicated enthusiastic interest to participate.”
Meanwhile, Facebook Inc. declined to comment on PayPal’s exit. The Libra Association now has 28 members, including Uber Technologies Inc, Lyft Inc and Spotify Technologies. However, the Wall Street Journal reported earlier this week that Visa, Mastercard and several other financial partners that had signed up were “reconsidering” their participation in the Libra project due to pressure from government officials.
Facebook unveiled plans to launch its digital currency by June 2020 this past summer. However, the project faces difficulties globally due to skeptical regulators. France and Germany both stated last month that they would attempt to block Libra from operating in Europe, saying it posed risks to EU states’ sovereignty. The European Central Bank also repeatedly called for a strict oversight of Libra and is to present a report on it at the upcoming G20 meeting.
US Federal Reserve Chairman Jerome Powell recently said that Libra raises “serious concerns regarding privacy, money laundering, consumer protection, financial stability.” The Fed later launched a working group to examine the new coin.