It is another low for Facebook’s new cryptocurrency Libra. The crypto, which is scheduled for kickoff sometime next year has suffered a setback as PayPal, a key member of the 28 financial nonprofit organizations has pulled out. The 28-member nonprofit organization was formed in June 2019 to oversee the creation of Libra.
PayPal in a statement per The Verge did not provide any specific reason for this action, but announced that it wanted “to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations.”
“We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future,” the statement continues. “Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.”
While PayPal’s statement did not clearly state reasons why it decided to withdraw its membership, the Financial Times reports that the financial powerhouse had indeed begun distancing itself from the project probably due to regulatory scrutiny that has been on the increase since the project was first announced. FT reports that PayPal is worried by Facebook’s executives lack of attention considering the backlash that has befallen the announcement of Libra. If that was not an issue enough to be worried about, PayPal also seemed to be worried about how the platform would deal with money laundering activity.
In what seems like a response to PayPal’s decision to pull out of the association, Libra’s Head of policy and communications Dante Disparte said in a statement per The Verge that:
“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,” Disparte writes. “The journey will be long and challenging. The type of change that will reconfigure the financial system to be tilted towards people, not the institutions serving them, will be hard. Commitment to that mission is more important to us than anything else. We’re better off knowing about this lack of commitment now, rather than later.”
Last June, Facebook finally and officially unveiled all the details about its own digital currency backed by all the giants in the financial world. Libra, according to Facebook, will let you buy things or send money to people with no charges.
You will be able to cash out your Libra online, or at a local exchange point such as grocery stores. You can spend your Libra using Facebook’s Calibra wallet that will be integrated into Facebook owned WhatsApp, Messenger, the Facebook’s main app, or interoperable third-party wallet apps.