Facebook's Troubles Continue as a Seventh Member of Libra Association Drops Out

On Monday (October 14), according to a report Bloomberg, Booking Holdings, the leader in online travel (owner and operator of some of the world's top travel websites, including Booking.com, Priceline.com, and Kayak.com), became the seventh founding member of the Libra Association to quit Libra, the Facebook-led stablecoin project.

On June 18, when Facebook first officially introduced Libra, we were told that the Libra Association is an independent not-for-profit membership organization headquartered in Geneva, Switzerland and that there were 28 founding members, "a group of diverse organizations from around the world."

On October 4, PayPal quit the Libra project.

Four days later, on October 8, two senior U.S. Senators—Brian Schatz (D-HI) and Sherrod Brown (D-OH)—wrote letters to the CEOs of Visa, Mastercard and Stripe in order to share their "deep concerns" about Libra and the Libra Association because important questions about the risks posed by this project "remain unanswered." They also wanted these companies to consider how would they be able to manage these risks before going ahead with this project given that Facebook has not yet proven to U.S. Congress or to financial regulators "that it is taking these risks seriously." 

Then, on October 11, according to reports published in Bloomberg and in the Financial Times, five more organizations—Visa, Mastercard, eBay, Stripe, and Mercado Pago—followed PayPal's lead and withdrew from the Libra Association. 

Visa had this to say:

Visa has decided not to join the Libra Association at this time. 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.

Later that day, according to a report by CNBC, Dante Disparte, Policy and Communication Head of Libra Association, stated:

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

With seven of the original 28 founding members gone, it is tempting to think that Facebook has no choice but to throw in the towel and give up its dream of creating its own stablecoin. But despite these huge setbacks and the incredible amount of regulatory scrutiny that Facebook and Libra Association will continue to face over the coming months, Facebook's immense financial resources and determination should not be underestimated.

We need to remember what David Marcus, who is a co-creator of Libra and the Head of the Calibra wallet project at Facebook, wrote on Twitter on October 11:

 

Featured Image Credit: Photo via Pixabay.com

PayPal Reveals Cryptocurrency Development in Letter to European Commission

Michael LaVere
  • Payments giant Paypal has revealed it is working on developing cryptocurrency capabilities.
  • The company's letter to the European Commission supports crypto industry regulation and the creation of transparency. 

Payments giant PayPal has revealed its intention to develop cryptocurrency-related “capabilities” following the announcement of Facebook’s Libra in June 2019. 

In a letter to the European Commission in March, PayPal said it was “assessing” the need for a European framework for cryptoassets that would support the integration of payments and financial services.  

PayPal said the crypto-asset industry had experienced substantial growth over the past few years and generated discussion about the impact of decentralization on central bank digital currencies.

The letter reads:

As such, PayPal is continuously monitoring and evaluating global developments in the crypto and blockchain/distributed ledger space. Of particular interest for us is how these technologies and crypto-assets can be utilized to achieve greater financial inclusion and help reduce/eliminate some of the pain points that exist today in financial services.”

The letter continues, claiming that PayPal has an interest in how cryptocurrency technology can be used to promote transparency and compliance efforts and would be supportive of the European Commission’s attempts to regulate the industry. 

PayPal revealed that it had taken “unilateral and tangible steps to further develop its capabilities” in the area of cryptocurrency since signing a letter of intent to participate in the Libra Association established in June 2019. 

Featured Image Credit: Photo via Pixabay.com