- 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.”
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