PayPal Drops Out of Libra Association (Bitcoinerx)
Facebook’s Libra cryptocurrency has taken a blow as PayPal has officially dropped out of the Libra Association.
Few cryptocurrencies in recent memory have caused such gnashing of teeth than Facebook’s upcoming Libra. Lawmakers in multiple countries have expressed reservations and even outright hostility towards the stablecoin. Now the crypto takes another hit as PayPal, the global payments behemoth, has decided to drop out of the Libra Association.
PayPal Says No More
The Libra Association is based in Geneva, Switzerland, and features 28 major companies and non-profits, such as Uber, Mastercard, Lyft, and Visa. The association was created to provide governorship over the cryptocurrency, allowing Facebook to take a step back and not be tagged as the sole company controlling the virtual currency.
Now the Libra Association finds itself losing a notable member as PayPal withdraws. The company says it will focus on its existing operations and will continue working with Facebook on other ventures, stating:
Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.
Dante Disparte, head of policy and communications for the Libra Association, says the association will keep moving forward despite the loss of PayPal. He says:
Building (Libra) is a journey, not a destination … each organization that started this journey will have to make its own assessment of risks and rewards of being committed to seeing through the change that Libra promises.
It requires a certain boldness and fortitude to take on an endeavor as ambitious as Libra — a generational opportunity to get things right and improve financial inclusion. The journey will be long and challenging. We’re better off knowing about this lack of commitment now, rather than later.
Since Facebook announced the Libra and its governing association, it has faced an uphill battle against multiple governments. Several United States representatives, such as Maxine Waters (D-California) and Brad Sherman (D-California), have been open in that the cryptocurrency’s development be stopped.
Members of the Federal Advisory Board told the Federal Reserve that they believe the introduction of the Libra would lead to a “shadow banking system” that would have negative repercussions for both the national and global banking systems.
In Europe, German Finance Minister Olaf Scholz said recently, “A core element of state sovereignty is the issuance of a currency. We will not allow private companies to do it.”
The Financial Services Committee wants Mark Zuckerberg to appear before them by January, so it is postponing a panel about Libra featuring Facebook COO Sheryl Sandberg in order to get him to comply.
One wonders if more cracks in the Libra Association will show up as the pressure intensifies. The Wall Street Journal recently reported that Visa and Mastercard were considering leaving the Libra Association too.
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