Facebook's cryptocurrency project suffers massive blow as MasterCard, Visa, eBay, and others withdraw from Libra (FB)


FILE PHOTO: Facebook CEO Mark Zuckerberg testifies before a House Energy and Commerce Committee hearing regarding the company's use and protection of user data on Capitol Hill in Washington, U.S., April 11, 2018. REUTERS/Leah Millis/File Photo

  • MasterCard, Visa, eBay, Mercado Pago, Booking Holdings, and Stripe are exiting Facebook’s planned cryptocurrency project, Libra.
  • PayPal also dropped out of talks to work with Facebook on Libra in recent weeks.
  • Facebook’s deteriorating relationships with Libra partners, combined with intense scrutiny from lawmakers, leaves the future of the initiative uncertain.
  • Facebook’s exec leading Libra, David Marcus, thanked Visa and MasterCard “for sticking it out until the 11th hour,” and cautioned against “reading the fate of Libra into this update.”
  • Visit Business Insider’s homepage for more stories.

The future of Facebook’s cryptocurrency project is in jeopardy as many of the companies initially attached to Libra have jumped ship.

Mastercard, Visa, eBay, Stripe, and Mercado Pago will all no longer participate in the Libra Association, the group working to launch Facebook’s proposed cryptocurrency, the Financial Times and Bloomberg first reported on Friday. Facebook confirmed the departures to Business Insider.

On Monday, CNBC reported that Booking Holdings has also departed the initiative. The company did not immediately respond to a request for comment.

PayPal on October 4 was the first major partner to withdraw from the organization.

The exits, combined with intense scrutiny from lawmakers, represent a huge blow to the initiative and leave its future uncertain.

Former PayPal President David Marcus is the chief executive behind the Libra initiative, and he tweeted out thanks to MasterCard and Visa for sticking with the project as long as they did.

“We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member. At this time, we are focused on rolling out eBay’s managed payments experience for our customers,” an eBay spokesperson told Business Insider in a statement.

“Visa has decided not to join the Libra Association at this time,” a spokesperson told Business Insider. “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’s continued interest in Libra stems from our belief that well-regulated blockchain-based networks could extend the value of secure digital payments to a greater number of people and places, particularly in emerging and developing markets.”

In a separate statement, Stripe said it would consider rejoining the association in the future.

“Stripe is supportive of projects that aim to make online commerce more accessible for people around the world,” a spokesperson told Business Insider. “Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage.”

A spokesperson for MasterCard was not immediately available to comment. Lawmakers urged MasterCard and Visa to withdraw from the Libra Association after a recent report from The Wall Street Journal said both companies were reluctant to offer public support for Facebook’s cryptocurrency.

Facebook announced its plans for Libra in June and said it would work to satisfy the concerns of regulators in the US and abroad before launching.

Read more: Facebook blockchain boss David Marcus says Libra won’t launch until it has ‘fully addressed regulatory concerns’

Marcus tried to assuage concerns from US lawmakers during an extended Senate hearing in July. US lawmakers expressed concerns over Facebook’s ability keep Libra secure and questioned whether a well-funded cryptocurrency would give the social-media giant too much market power.

Facebook CEO Mark Zuckerberg will testify before the House Financial Services Committee on October 23, where he is likely to face more tough questions regarding Libra.

“We appreciate their support for the goals and mission of the Libra project,” Facebook’s Dante Disparte, the head of policy and communication for the Libra Association, told Business Insider in a statement. “We are focused on moving forward and continuing to build a strong association of some of the world’s leading enterprises, social impact organizations and other stakeholders to achieve a safe, transparent, and consumer-friendly implementation of a global payment system that breaks down financial barriers for billions of people.

“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,” he continued. “We look forward to the inaugural Libra Association Council meeting in just 3 days and announcing the initial members of the Libra Association.”

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