A week after Paypal Holdings Inc (NASDAQ:PYPL) quits the Libra Project of Facebook, Inc. (NASDAQ:FB), MasterCard, Visa, Stripe, and eBay followed suit. It is a setback for the ambitions of Facebook to introduce a private global currency to facilitate cross border payments.
A 28-member organization crumbles
The decision of the major payment processors to withdraw from Libra Project, a 28-member non-profit organization, is crumbled, shattering the dreams of Facebook. Visa would not join the association at the moment and wait for an appropriate time to decide after carefully watching the ability of the organization to comply with regulatory requirements.
Libra council meeting on October 14, 2019
In Geneva, the Libra council would conduct the first official meeting on October 14, 2019. The members would unveil commitments at this meeting, but the withdrawal of significant processors leave the Libra in a precarious state. According to a communiqué from eBay, it would not join as the founding member. eBay would focus on offering managed payments to its customers. Like eBay, Stripe supports Libra, but it will also stay away from the project. Stripe said Libra makes e-commerce more access to consumers worldwide. It will decide at a later stage after carefully watching the progress of Libra.
Dante Disparte, Libra Association Policy Chief, conveyed thanks to all the members for their support to the organization. The association would move forward by roping in leading enterprises from across the world and other social impact organizations. The inaugural meeting would be held on October 14 and will announce initial members in the organization.
Several regulators and governments see Libra as a threat to the existing financial system and putting pressure on the members to quit the association. Stripe, MasterCard, and Visa received a message from two senators to think about their involvement in the project because it could cause significant regulatory consequences for the payment processors. Their engagement invites regulatory scrutiny into all of their activities and not just activities involving Libra.
According to David Marcus, Libra Chief, the withdrawal of Paypal is not okay for the project. Visa and MasterCard wait for clarity from regulators after withdrawing from the project.