Leading digital payments firm PayPal said, on Friday, 4th October, it will no longer be part of an alliance intended to oversee Facebook’s Libra cryptocurrency. Libra has come under attack by regulators.
PayPal spoke to AFP about ending support for Facebook’s Libra cryptocurrency. The California-based company said,
“PayPal has made the decision to forgo further participation in the Libra Association at this time. We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future.”
Meanwhile, international outcry is mounting over Libra. Ventral banks, governments and regulators are railing against Facebook’s upstart cryptocurrency and questions over how it would be regulated.
The social media giant unveiled plans in June for Libra, which will roll out in 2020. A basket of currency assets will also back Libra to avoid the wild swings of Bitcoin and other virtual units.
Also, the nonprofit Libra Association will oversee the blockchain-based coin, maintaining a real-world asset reserve to keep its value stable.
Facebook envisioned Libra as a new global cryptocurrency.
The company pledged to deliver stable virtual money that lives on smartphones. It could bring over a billion “unbanked” people into the financial system.
Hundreds of billions of dollars are transferred annually between migrants to friends and family in their home countries, and PayPal is a player in that sector.
Mastercard, Visa and also other financial partners enlisted to oversee Facebook-backed cryptocurrency Libra have second thoughts. This comes as regulators unleash ire on the project and dig for information from members of the association.
The head of the Libra Association said that the project’s leaders aimed to “reassure” regulators worried about the virtual money. Besides Facebook, Visa and MasterCard, backers of Libra include ride-hailing apps Lyft and Uber.
Meanwhile, in leaked comments from a meeting of Facebook employees in July, Facebook chief executive Mark Zuckerberg said he remained optimistic for Libra despite harsh comments from public officials in several countries.
He said,
“The public things, I think, tend to be a little more dramatic. But a bigger part of it is private engagement with regulators around the world. And those, I think, often, are more substantive and less dramatic… That’s where a lot of the discussions and details get hashed out on things.”