Skip to main content

Facebook’s crypto dreams could be crushed as PayPal exits Libra Association

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.

Editors' Recommendations

Georgina Torbet
Georgina is the Digital Trends space writer, covering human space exploration, planetary science, and cosmology. She…
Congress shows Facebook CEO Mark Zuckerberg no mercy during Libra hearing
Facebook Chairman and CEO Mark Zuckerberg testifies before the House Financial Services Committee on "An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors" in the Rayburn House Office Building in Washington, DC on October 23, 2019.

Lawmakers on the House Financial Services Committee grilled Facebook CEO Mark Zuckerberg over the platform’s proposed Libra cryptocurrency and the social media giant's practices as a whole during a wide-ranging hearing on Wednesday morning, October 23. 

Zuckerberg answered questions about both the company’s questionable past and the new Libra idea alike, assuring the committee that he would follow the rules before Facebook got into any type of cryptocurrency involvement. 

Read more
Watch Live: Mark Zuckerberg testifies before Congress about Facebook Libra
Mark Zuckerberg Testifies Before Congress

Facebook Co-Founder Mark Zuckerberg Testifies Before House Financial Services

Facebook CEO Mark Zuckerberg will be back in Washington to testify before the House Financial Services Committee about Facebook’s cryptocurrency Libra on Wednesday, October 23. You’ll be able to watch Zuckerberg's testimony today live in the player above starting at 7 a.m. PT.

Read more
Here’s how Mark Zuckerberg plans to defend Facebook Libra in front of Congress
Facebook CEO Mark Zuckerberg in Washington, D.C.

Facebook CEO Mark Zuckerberg will argue before Congress on Wednesday, October 23 that the social network's cryptocurrency, known as Libra, is essential to expanding banking access around the globe, according to a written version of his testimony released Tuesday.

"There are more than a billion people around the world who don't have access to a bank account, but could through mobile phones if the right system existed," Zuckerberg said. "This includes 14 million people here in the U.S."

Read more