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Washington, D.C. – PayPal recently announced it is dropping its support to the Facebook backed Libra Association.
The company gave a statement, Friday, on its decision to forgo any and further association with Libra, and shifting their time and efforts into advancing their existing business priorities and missions. The decision came amidst the harsh criticisms that the Libra cryptocurrency is facing from entrepreneurs and lawmakers at the moment.
Before PayPal made its final decision to drop off the Libra Association, the group had 28 corporate backers to serve as founders and the governing body of Libra, which includes Facebook. From the announcement made by Facebook about the Libra project, each founding member of the group was set to invest no less than $10 million each, but no investment has been made yet.
With PayPal as the first to drop from the group, Libra has long been experiencing shakeups. Early in October, there have been several reports about other companies and corporate backers reconsidering their involvement and investment with Libra cryptocurrency. It has also been reported that MasterCard and Visa are also looking to withdraw their support to Libra.
Before any issues Libra are now facing, it was backed by 28 firms including Facebook, PayPal, Visa, MasterCard, Stripe, Lyft, eBay, Uber, Kiva, Vodafone Group, Spotify, Mercy Corps, Andreessen Horowitz, Women’s World Banking, and many others. These companies have given their non-binding intention of supporting Libra from the ground up. PayPal is now out of the group – the first one since Facebook made an announcement of its new cryptocurrency project last June.
Since Facebook made its crypto project announcement only a few months ago, however, it has already met a lot of criticism from both regulators and policymakers. They have expressed significant concerns about the supposed dominating role Facebook already has, especially with their privacy issues as of late. Regulators have also expressed their desire to apply banking regulations to the cryptocurrency.
From its current nearly 30 backing members, Facebook is aiming to have about 100 members within the Libra association, since its inception, before launching the project, which is set between the first and second quarter or 2020. Although Facebook will maintain the leadership role for Libra until the end of 2019, it is set that the decision-making authority will be solely transferred with the association after this year.
Despite the current issues thrown on Libra’s way early on its years, and despite PayPal’s sudden exit from the group, these aren’t necessarily causing the end for the project. A loss of support from PayPal from the long list of other payment incumbents in its members, it wouldn’t be the end of Libra. It is designed to be accessed using digital wallets specific for Libra from third parties as well as Facebook. And Libra is still set to thrive, especially with the subsidiary that Facebook created, the Calibra. It plans to provide people with a Lira wallet service that offers access through Facebook Messenger, WhatsApp, and as a standalone app.
