- Visa and MasterCard leave the Libra Association, meaning it could be much harder for the Facebook-backed cryptocurrency to achieve its aims
- Visa says it will remain open to working with Libra in the future once regulatory issues are sorted – as Stripe, a tech payments firm, also quits
- “Visa’s continued interest in Libra stems from our belief that well-regulated blockchain-based networks could extend the value of secure digital payments to a greater number of people and places”, said Visa in a statement
Facebook’s proposed cryptocurrency Libra suffered from more problems over the course of the weekend and into Monday after it was hit by further big name dropouts from its consortium.
Just a week after major online money transfer giant PayPal announced it was leaving the group, Libra began to face more problems.
Visa and MasterCard have both now announced that they will quit the project, as did Stripe, a financial services tech company.
There are a number of reasons why this move is problematic for the consortium behind Libra.
First off, the two firms are currently responsible for almost all credit card payments in North America and Europe – and the same can be said for debit cards too.
They are also running other projects at the moment designed to make inroads into the unbanked world, which is also one of Libra’s key strategic priorities.
Without these two providers on side, it is looking less and less likely that Libra will be able to achieve this goal.
The Libra Association, which is the official name of the group which these organisations have pulled out of, is supposed to hold a contract signing event in the coming days.
While PayPal was more vague about its reasons for leaving, Visa said in a statement that Facebook needed to act in order to ensure that it was meeting its regulatory requirements and it left the door open to more work in the future.
Visa said that Facebook must “fully satisfy all requisite regulatory expectations”.
“Visa’s continued interest in Libra stems from our belief that well-regulated blockchain-based networks could extend the value of secure digital payments to a greater number of people and places, particularly in emerging and developing markets”, it added.
Fintech firm Stripe has also left the project.
“Stripe is supportive of projects that aim to make online commerce more accessible for people around the world”, it said.
“Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage.”
The organisations now remaining as members of the Libra Association appear largely to be start-ups which are much closer to the venture capital stage of their developments, as opposed to long-established corporations.
They include Lyft, Uber and Spotify.
To keep up with the latest, head over to our magazine pages to read more about the goings-on in the cross border payments world.
