Blow for Libra as PayPal bows out

| |

Daniel Webber
Daniel Webber
Founder & CEO
Daniel is Founder and CEO of FXcompared and has 18 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors. Daniel is widely… Read more

  • PayPal fails to provide reason for leaving – although regulatory situation expected to be part of the problem
  • Visa and MasterCard also rumoured to be on the verge of pulling out
  • “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”, it said in a statement

Facebook’s blockchain-powered online money transfer service Libra suffered a significant blow over the weekend and into Monday after a leading name in the payments sphere pulled out of the project. 

PayPal, which is well-known as a longstanding cross border payments provider in its own right, did not cite clear reasons for its decision. 

In a vague statement, it said it would renew its focus on tackling issues in the underbanked world.

However, it did say that it considered Facebook to be a “longstanding and valued strategic partner”.

“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 democratise access to financial services for underserved populations”, it said in a statement to the press.

“We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future. Facebook has been a longstanding and valued strategic partner to PayPal and we will continue to partner with and support Facebook in various capacities”, it added.

Libra, which will be pegged against fiat currencies and hence is in a regulatory grey area, was not announced long ago. 

However, Facebook’s beleaguered crypto service is far from ready to launch. 

It has been hit in recent months by claims for lawmakers and regulators around the world, especially given that there is no clear regulatory category in which to slot it.

In France, for example, the government has confirmed that it will block Libra altogether. 

The decision from PayPal was not the only issue that the budding service has had to deal with. 

According to press reports in the Wall Street Journal newspaper last week, other well-known financial services names – including Visa and MasterCard – are considering pulling out. 

The key deadline for this will be a meeting between those involved next Monday, 14th October. 

In a statement following this press report, a senior Visa figure doubled down – and said that because the project was in such an early stage, it was easier for the organisations involved to pull out once discussions had taken place.

“No one has yet officially joined”, said Al Kelly, its chief executive. 

“We’re in discussions and our ultimate decision to join will be determined by a number of factors, including obviously the ability of the association to satisfy all the requisite regulatory requirements.”

Stay ahead of the curve on every aspect of the online money transfer world’s goings-on. Head over to our magazine page and check out more news stories.


Most Read

Use Our Currency Comparison Tool

Select country...

Select country...

Send

Editor's Choice

FXcompared.com is an fx money comparison site for international money transfer and to compare rates from currency brokers for sending money abroad. The website and the information provided is for informational purposes only and does not constitute an offer, solicitation or advice on any financial service or transaction. None of the information presented is intended to form the basis for any investment decision, and no specific recommendations are intended.  FXC Group Ltd and FX Compared Ltd does not provide any guarantees of any data from third parties listed on this website. FX compared Ltd expressly disclaims any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from (i) any error, omission or inaccuracy in any such information or (ii) any action resulting therefrom.