The Facebook Libra Association is supposed to guarantee the evolution of the currency of the glove of the social networks will it collapse? Visa, MasterCard, eBay, Stripe and Mercado Pago, founding members of the association, announced Friday that they are abandoning the cryptocurrency project, reports Reuters. This news comes one week after the announcement of PayPal's withdrawal, as government regulators continue to scrutinize plans for the new electronic currency.The withdrawal of the project from the major payment companies, including Mastercard and Visa Inc., is a serious problem for the nascent project and the ambitious efforts of Facebook Inc. to establish a global digital currency. These withdrawals mean that The Libra Association can not rely on these major US payment processors to help consumers convert their currency into Libra and facilitate their transactions. The other members of the association, including Lyft and Vodafone, are mainly venture capital, telecommunications, blockchain and technology companies, as well as non-profit groups, Reuters reported.
In a statement, a spokesman for Visa said Friday that the company will continue to value and our final decision will be determined by a number of factors, including the ability of the association to fully meet all the regulatory expectations. Libra's sustained interest in Libra stems from our belief that well-regulated blockchain-based networks could stretch the value of digital payments to more people and places, especially in emerging and developing markets. .The internet payment company for professionals Stripe gave a similar explanation for its withdrawal. Stripe supports projects that make online commerce more accessible for people around the world, said the spokesman for the company. The Libra has this potential. We will follow its progress closely and remain open to work with The Libra Association at a later stage.
eBay has the same sense as the first two companies. We highly respect the vision of the Libra Association, said the company in a statement. However, eBay has made the decision not to go ahead as a founding member. Right now, we are focusing on deploying eBay's payment experience for our customers, she added.
These decisions come before the meeting of the Libra Association Council scheduled for 14 October. This meeting in Geneva will probably lead to more specific and definitive commitments from all the members involved, which may have inspired the recent series of defections of some founding members. Nevertheless, the departures leave the project in a precarious situation, while Facebook makes efforts to go beyond the initial criticisms of the project.
In response to these withdrawals, Dante Disparte, Policy Officer of the Libra Association, in a statement, thanked the companies for their continued support the mission of the organization.
We are determined to move forward and continue to build a strong partnership with some of the largest corporations, social impact organizations and other stakeholders in the world, "he said. Although the membership of the Association can grow and change over time, Libra's governance and technology design principle, as well as the open nature of the project, ensure that the network's payment network Libra will remain calm. We look forward to the inaugural meeting of the Libra Association Council in just 3 days and the announcement of the first members of the Libra Association, added Disparte.
While the original coalition of 28 companies supporting Facebook's cryptocurrency seems to be dwindling, Mark Zuckerberg, chief executive officer of the company, is expected to discuss the project when he testifies before the US House Financial Services Committee on October 23, 2011. Reuters. This step will put the Libra project at the center of the attention of American legislators.
David Marcus, who runs the Libra project and was previously chairman of PayPal, tweeted a few hours after the announcements. In response to the news, he conceded that the news was not a good new short-term, but liberating to know that one is on something when so much pressure rises. Marcus also warned against reading the fate of the Libra in this update.
Libra's difficulties have not started with the latest withdrawals announced Friday
Libra is Facebook's new cryptocurrency based on blockchain technology and has its own digital wallet. It is supposed to buy goods or send money as easily as an instant message. Facebook is presenting it in June 2019, with the participation of 28 other companies from the financial, electronic commerce, technology and telecommunications sectors, including those that have withdrawn from the project. Together, they form the Libra Association, which must guarantee the evolution of the currency.
In partnership with members of the association, Facebook announced its intention to launch the digital currency in June 2020. But global regulators, who said the project raised a lot of serious questions that the group had not yet replied, have not late submit it a continuous scrutiny.
Last July, Jerome Powell, President of the United States Federal Reserve (FED), said Libra raises many serious concerns about the protection of privacy, money laundering, the protection of human rights consumers and financial stability, and these concerns must be addressed thoroughly and publicly before moving forward. In the same month, President Donald Trump also took Facebook and other cryptocurrencies by asking companies to look for a bank charter and to comply with US and global regulations if they wanted to become a bank.
In September, France and Germany, which were not convinced by Facebook's cryptocurrency project, pledged to prevent the Libra from operating in Europe and instead supported the development of a public cryptocurrency.
Last week, PayPal, Visa and Mastercard had begun to reconsider their support for Facebook's Libra project, to avoid attracting the attention of financial regulators. This led to the withdrawal of PayPal, the first member of the association to leave the project. Last Wednesday, two high-ranking Democratic leaders wrote Visa, Mastercard and Stripe to tell them to beware of a project that is likely to fuel the growth of global criminal activity, Reuters reported.
If you do, you can expect a high level of scrutiny from regulators not only on Libra-related payment activities, but on all payment activities, writes Sherrod Brown and her Democratic colleague Brian Schatz in these letters.
Brown also said in a statement after Friday's announcements that the companies were wise to avoid legitimizing Facebook's private and global currency.
Following the news of withdrawals, a Twitter user wondered if everyone suddenly realized that Libra is a trick to lock the trade in a social system controlled by Facebook?
What fate will be reserved the electronic currency Libra if other companies came to follow those who have already withdrawn. According to a commentary on the subject, one of the main conditions for trust in this currency is that governance and operation will be ensured by a group of powerful and trustworthy companies. But the more the companies leave the initiative, the more it becomes centralized and the less its model of trust is valid, wrote the commentator. If there is only Facebook left, it is not different from a simple virtual currency (like abandoned Facebook credits), he added.
Sources: Reuters, Tweet
And you ?
What do you think of these new withdrawals from the Libra project?
According to David Marcus, Friday's withdrawal is not a good new short-term, but in a sense, it's liberator. What do you think ?
Do you think that other companies will follow this withdrawal?
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