PayPal Withdraws from Facebook’s Libra Cryptocurrency

On Friday Paypal announced that they are withdrawing the association with Facebook’s cryptocurrency Libra coin.

“PayPal has made the decision 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,” PayPal said in a statement.

A decision by the payments group to quit Libra would be a big blow for the project, which is being steered by David Marcus, a Facebook executive who was previously PayPal’s president.

David Marcus, who leads the project at Facebook, was previously the president of PayPal. PayPal said it is still “supportive of Libra’s aspirations” and that it will continue to partner with Facebook in the future.

Dante Disparte, head of policy and communications for the Libra Association, said in an emailed statement, “We recognize that change is hard and that 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.”

Libra cryptocurrency has been criticized by regulators, and both France and Germany have pledged to block it from Europe.

Federal Reserve Chairman Jerome Powell said this summer that libra raises “serious concerns regarding privacy, money laundering, consumer protection, financial stability” and the Fed had launched a working group to examine it.

Rep. Maxine Waters, D-Calif., chairwoman of the House Financial Services Committee, told CNBC in June that “it’s very important for them to stop right now what they’re doing so that we can get a handle on this” and Congress would “move aggressively” to deal with it.

Facebook and other members of the Libra Association are due to meet this month in Geneva to appoint its first board of directors, but ahead of that, it’s been reported that the government scrutiny has started to spook some who have only nominally backed the project at this point.

The Group of Seven advanced economies warned in July that it would not let Libra proceed until all regulatory concerns had been addressed.

Central bank chiefs, including the UK’s Mark Carney, have also voiced skepticism, and US President Donald Trump has tweeted he is “not a fan” of the currency.

The Libra Association will hold the first meeting of its governing body – the Libra Council – on 14 October.

Kalyani Sinha
Kalyani Sinha
Kalyani is an avid research scholar from New Delhi. As a person, she is strongly mellow and adamantly non-Art. Unorthodox; literature is soul. Not only is she in demand for the curious ability that she prospers to capture the essence of technology and development , it is also that, set as a milestone in her journey filled with intrigue, is the study of cryptocurrencies and blockchain. A stepping stone in this journey is her role at StackZea.