Facebook loses key Libra backers - Mobile World Live

Facebook loses key Libra backers

14 OCT 2019

Five companies including Mastercard and Visa withdraw their backing for Facebook’s blockchain-based Libra payments play, throwing the project into further doubt.

Along with the two financial giants, payments companies Stripe and Mercado Pago, and e-commerce company eBay also quit the Libra Association, the group set up to run the project.

The companies followed PayPal, which quit the association earlier this month. The withdrawals of Mastercard, Visa and Stripe, in particular, are significant as it leaves Facebook without a major financial payments company backing Libra.

Remaining members of the association are companies in venture capital, technology, blockchain, telecoms and not-for-profit groups.

Hurdles
Libra was due to launch in 2020 but has faced a number of hurdles since being unveiled, with regulators across the globe expressing concerns about Facebook’s move into the sector.

Mastercard, Visa and Stripe came under pressure from the US government, with politicians warning they should rethink their particpation or face greater regulatory scrutiny.

In a statement confirming its exit, Visa said it “decided not to join the Libra Association at this time”, but did not rule out a future move: “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.”

Dante Disparte, head of policy and communication at Facebook said it will move forward with plans to formally charter the association this week, despite the exodus.

“Although the make-up 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 that Libra payment network will remain resilient.”

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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