More Companies Back Away from Facebook’s Libra Coin

Agency Report/

Facebook’s digital currency alliance lost more companies on Friday amid heavy criticism from regulators around the world on the planned Libra global cryptocurrency.

Credit card giants Visa and Mastercard, online marketplace eBay and digital payments firm Stripe each announced they had changed their minds about being founding members of the Libra Association assembled to promote the digital currency.

“Mastercard has decided it will not become a member of the Libra Association at this time,” the company said in an emailed statement.

“We remain focused on our strategy and our own significant efforts to enable financial inclusion around the world. We believe there are potential benefits in such initiatives and will continue to monitor the Libra effort.”

A Visa spokesperson offered a similar statement, indicating the company was dropping out of the alliance but could rejoin in the future.

“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,” Visa said.

Silicon Valley-based eBay said: “We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member.”

Stripe also said it will follow the progress of Libra and remain open to working with the association at a later date.

“Stripe is supportive of projects that aim to make online commerce more accessible for people around the world,” Stripe said. “Libra has this potential.”

The moves come after US senators sent letters to several financial firms noting that they could face “a high level of scrutiny from regulators” if they participated in the new currency plan.

Last week, digital payments firm PayPal said it was quitting the alliance of companies and organizations promoting Libra.

The Libra Association did not immediately return a request for comment.

The move comes with Facebook’s planned digital coin Libra facing heavy criticism from regulators and lawmakers in the United States and Europe.

Facebook executives have claimed the new digital coin could help lower costs for global money transfers and help those without access to the banking system.

French economy and finance minister Bruno Le Maire has warned that under current circumstances, Libra posed a threat to the “monetary sovereignty” of governments and could not be authorized in Europe.

Facebook chief Mark Zuckerberg is set to testify October 23 hearing in the US House of Representatives on the Libra plan.

*AFP

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