Facebook’s cryptocurrency ambitions through its Libra Association has just seen a massive setback. Specifically, a number of high-profile founding members has just left the Libra Association en masse.
Libra Association in crisis as Mastercard, Visa, eBay and Stripe leave
Around a week ago, Toshi Times first reported that PayPal was withdrawing from the Libra Association. At the time, some were speculating that this could be the first of many exits from Facebook’s crypto association.
Now, it appears that these were correct – as Mastercard, Visa, Stripe, eBay and Mercado Pago have all withdrawn from the Libra Association. This news has been corroborated by both a recent Bloomberg report and a piece from the Financial Times.
This somewhat shocking reveal comes just a few days before the first official meeting of the Libra Council. This is scheduled to take place on October 14th in Geneva. It is widely expected that this meeting will see some of the members make more explicit commitments to Libra.
Why did these companies leave now?
As such, some speculate that this may have been a contributing factor in the recent series of defections. Moreover, a representative from Visa made the following statement in relation to the firm’s exit from Libra:
”Visa has decided not to join the Libra Association at this time. 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.”
As for eBay, the online shopping behemoth said that it ”highly respect[s] the vision of the Libra Association, 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.”
This shows that the firms are generally supportive – at least officially – despite their recent mass-exit from the Libra organization. Stripe made a similar statement as Visa and eBay, suggesting it may join again:
”Stripe is supportive of projects that aim to make online commerce more accessible for people around the world. Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage.”
Is this the end for the Libra Association or not?
Nevertheless, the Libra Association’s policy head, Dante Disparte, suggests that this mass exodus is not a major setback. Instead, Disparte went on to note that the organization seeks to ”move forward”, stating:
”We are focused on moving forward and continuing to build a strong association of some of the world’s leading enterprises, social impact organizations and other stakeholders. We look forward to the inaugural Libra Association Council meeting in just 3 days and announcing the initial members of the Libra Association.”
With that said, it remains to see whether other Libra members will also reconsider their involvement. Whatever the case, Libra is facing increasing pressure from regulators. Just this past Wednesday, two US senators said that Visa, Mastercard and Stripe should all reconsider their Libra involvement.
Now, it appears clear that this is exactly what these firms have done. As such, the Libra Association does not currently have any cooperation with a major US payment processor. This could potentially prove to be a serious problem for Libra moving forward.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.