Facebook’s chances of launching its own cryptocurrency, Libra, are growing ever slimmer. On Tuesday this week, it was reported that Visa, Mastercard, and PayPal were all reconsidering their involvement in Facebook’s scheme following regulatory scrutiny from lawmakers in both the U.S. and Europe. Yesterday, PayPal put a first nail in Libra’s coffin by announcing it would no longer be participating in the Libra Association.
“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 democratize access to financial services for underserved populations,” PayPal said in a statement to TechCrunch. “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.”
The concept of the Libra Association is a regulatory body composed of representatives from top technology companies like Spotify and Uber as well as financial players like credit card companies. The association’s inaugural meeting is set for October 14 in Geneva, intended to be the venue to establish how companies will contribute to the cryptocurrency project.
However, it’s looking increasingly doubtful that the project will get off the ground, as experts and lawmakers have been raising alarms about the plan. There are worries that the currency could be used in money laundering operations, and also that Facebook is trying to get around national and international financial regulations. But the biggest concern in practical terms is whether it is realistic or achievable for a company with a record generously described as “spotty” to launch its own currency. In a Senate Banking Committee hearing about the concept in July, Sen. Sherrod Brown (D-Ohio) described Facebook’s plan as “delusional.”
None of this seems to be putting off Libra loyalists, however. A statement put out by a Libra spokesperson slammed PayPal for its “lack of commitment” and suggested it lacked the “boldness and fortitude” to join the endeavor. With PayPal out of the association, however, it seems increasingly likely that Mastercard, Visa, and others may pull out too, killing the cryptocurrency before it ever begins.
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