More companies back away from Facebook's Libra coin

Facebook has lost several powerful financial partners which have dropped out of the alliance on the Libra digital currency plann
Facebook has lost several powerful financial partners which have dropped out of the alliance on the Libra digital currency planned by the huge social network

Facebook's digital currency alliance lost more companies on Friday amid heavy criticism from regulators around the world on the planned Libra global cryptocurrency.

Credit card giants Visa and Mastercard, online marketplace eBay and digital payments firm Stripe each announced they had changed their minds about being founding members of the Libra Association assembled to promote the digital currency.

"Mastercard has decided it will not become a member of the Libra Association at this time," the company said in an emailed statement.

"We remain focused on our strategy and our own significant efforts to enable financial inclusion around the world. We believe there are potential benefits in such initiatives and will continue to monitor the Libra effort."

A Visa spokesperson offered a similar statement, indicating the company was dropping out of the alliance but could rejoin in the future.

"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 said.

Silicon Valley-based eBay said: "We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member."

Stripe also said it will follow the progress of Libra and remain open to working with the association at a later date.

"Stripe is supportive of projects that aim to make online commerce more accessible for people around the world," Stripe said. "Libra has this potential."

Fierce scrutiny

Libra Association confirmed that the companies would no longer be founding members, but said that it would continue building an alliance of businesses, social-good organizations, and others to implement the cryptocurrency.

The original list of founding members was cut to 23 factoring in the departures from the group on Friday.

"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," spokesman Dante Disparte said in response to an AFP enquiry.

"We are focused on moving forward... to achieve a safe, transparent, and consumer-friendly implementation of a global payment system that breaks down financial barriers for billions of people."

An list of founding members is to be announced at an inaugural Libra Association council meeting on Monday, according to Disparte.

The departures on Friday came after US senators sent letters to several noting that they could face "a high level of scrutiny from regulators" if they participated in the new currency plan.

Last week, firm PayPal said it was quitting the alliance of companies and organizations promoting Libra.

Facebook executives have claimed the new digital coin could help lower costs for global money transfers and help those without access to the banking system.

French economy and finance minister Bruno Le Maire has warned that under current circumstances, Libra posed a threat to the "monetary sovereignty" of governments and could not be authorized in Europe.

Facebook chief Mark Zuckerberg is set to testify October 23 hearing in the US House of Representatives on the Libra plan.

© 2019 AFP

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