Why it matters: Facebook’s Libra cryptocurrency was dealt a major blow on Friday when several backers joined PayPal in withdrawing their support. Visa, Mastercard, eBay, Stripe, and Mercado Pago have all left the Libra Association ahead of today’s first official meeting.
Back in June, Facebook confirmed long-running rumors by revealing its Libra cryptocurrency and Calibra digital wallet. But within 48 hours of the announcement, Senate officials announced it would be holding a hearing looking into the proposal.
In July, lawmakers asked Facebook to put its plans on hold so congress could examine privacy, security, and anti-competitive concerns surrounding Libra, and August saw some of the 28 backers discussing ways to distance themselves from the project. Additionally, France has vowed to block Libra in Europe.
At the start of this month, PayPal became the first backer to abandon Libra. With six more companies dropping out, the only payment processor left is Netherlands-based PayU.
“We appreciate their support for the goals and mission of the Libra project,” said a spokesperson for the Libra Association.
“Although the makeup of the Association members may grow and change over time, the design principle of Libra’s governance and technology, along with the open nature of this project ensures the Libra payment network will remain resilient.”
The first official meeting of the Libra Council is today, where members are expected to make official commitments to the cryptocurrency, which likely explains the timing of the dropouts.
While the withdrawals look bad for Libra, its chief, David Marcus, tried to put a positive spin on the situation.
I would caution against reading the fate of Libra into this update. Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.
— David Marcus (@davidmarcus) 11 October 2019