Home Breaking News UPDATE: Facebook Cryptocurrency Project Faces More Turmoil Ahead Of Launch

UPDATE: Facebook Cryptocurrency Project Faces More Turmoil Ahead Of Launch

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Several more “founding members” of Facebook’s cryptocurrency project Libra have pulled out of the program ahead of the first board meeting for the currency’s governing body Monday.

“Stripe and eBay have followed PayPal in backing out of Facebook’s cryptocurrency, Libra,” Engadget said. “They confirmed to the Financial Times that they would pull their support, while Mastercard and Visa have also dropped out.”

Neither Stripe nor eBay provided specific reasoning for their departures from the program.

“We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member,” eBay reportedly said in a statement. “At this time, we are focused on rolling out eBay’s managed payments experience for our customers.”

Stripe was similarly vague in its reasoning.

“Stripe is supportive of projects that aim to make online commerce more accessible for people around the world,” Stripe reportedly 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 companies also backed out of The Libra Association, which is a non-profit created independently from Facebook which is supposed to govern the cryptocurrency.

While Visa and Mastercard also pulled out, David Marcus, one of Libra’s executives, sent cryptic tweets suggesting that there is outside pressure on the “founding members” to exit, and that they might return after that pressure subsides.

“I would caution against reading the fate of Libra into this update. Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up,” he said.

I would caution against reading the fate of Libra into this update. Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.

— David Marcus (@davidmarcus) October 11, 2019

The news of the withdrawal of the four companies comes just one week after PayPal became the first company to drop its support.

“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,” the company said in a statement. “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.”

All of the “founding members” invested $10 million in the cryptocurrency project, and it remains unclear what will happen to their investments.

Meanwhile, The Libra Association remained defiant. Its policy and communication chief Dante Disparte spoke with CNBC.

“We are focused on moving forward and continuing to build a strong association of some of the world’s leading enterprises, social impact organizations and other stakeholders to achieve a safe, transparent, and consumer-friendly implementation of a global payment system that breaks down financial barriers for billions of people,” he reportedly said. “We look forward to the inaugural Libra Association Council meeting in just 3 days and announcing the initial members of the Libra Association.”

Questions remain about the implications that a Facebook-owned cryptocurrency could have, particularly for conservatives who have been banned from the platform simply for expressing conservative points of view. Facebook’s stated goal is to replace cash with its cryptocurrency.

We reported:

The question is this: what happens to banned users in the future if Libra does become the dominant form of currency worldwide? Will those who harbor the “wrong” opinions be stripped of the ability to participate in the marketplace? The larger story surrounding Libra is whether it is a tool that will ultimately be used for good or evil in society. We are allowing Big Tech to concentrate a great deal of power within their own organizations. What happens if they become too powerful? Or more powerful than the federal government, which some would argue is already the case?

Facebook CEO Mark Zuckerberg is set to testify before the House Financial Services Committee later in October, and Democratic Party lawmakers have drafted legislation that would prohibit Big Tech companies from creating their own cryptocurrencies.

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