Libra is the cryptocurrency brought to life by Facebook. The currency will be governed by a Swiss group, called the Libra Association, which currently includes 27 member companies including Facebook, Mastercard, Visa, Lyft, Uber and Spotify which they want to expand to 100 companies in 2020 when Libra is supposed to launch. Before today Paypal used to be among these companies, but they decided to back out of the project which means a major setback for Facebook’s Libra currency (The Guardian, 2019).
From the moment Facebook unveiled Libra, the cryptocurrency has faced a storm of criticism. Mainly regulators and bankers raise concerns about the potential threats to everything from data privacy to financial stability and monetary policy (Bloomberg, 2019). The French government even stated that they will block the development of Libra in the EU (The Guardian, 2019). Because of all these different institutions attacking the Libra currency even Facebook executives have started tempering expectations of the Libra currency reaching their proposed launch date halfway through 2020.
Now, with Paypal backing out of the Libra Association and rumors of major Libra backers such as Mastercard and Visa questioning their involvement, the uncertainty about the success of the project has grown even further (Coindesk, 2019). PayPal has not given a reason for abandoning the project but instead released a statement saying they will leave the Libra Association to keep focus on their core business. PayPal dropping their support and Visa and Mastercard supposedly questioning their involvement might be a sign that the legislators are getting their way and the Libra Association is slowly crumbling down. It will be interesting to see if any other companies follow PayPal’s lead.
Hern, A. (2019). Paypal puls out of Facebook Libra Cryptocurrency. The Guardian. [online] Available at: https://www.theguardian.com/technology/2019/oct/07/paypal-pulls-out-facebook-libra-cryptocurrency [Accessed 7 Okt. 2019].
Marsh, A. (2019). Facebook skeptics now have derivatives to bet on Libra delays. Bloomberg. [online] Available at: https://www.bloomberg.com/news/articles/2019-10-07/facebook-skeptics-now-have-derivatives-to-bet-on-libra-delays [Accessed 7 Okt. 2019].
Nelson, D. (2019). Institutional Libra Backers are getting cold feet. Coindesk. [online] Available at: https://www.coindesk.com/institutional-libra-backers-are-getting-cold-feet [Accessed 7 Okt. 2019].
Partington, R. (2019). France Block development Facebook Libra currency. The Guardian. [online] Available at: https://www.theguardian.com/technology/2019/sep/12/france-block-development-facebook-libra-cryptocurrency [Accessed 7 Okt. 2019].
