While Dante Disparte, Libra’s head of policy and communications, said that “it takes boldness and fortitude to take on a project as ambitious as Libra because it is an opportunity for our generation to do the right thing and improve financial inclusion,” the project suffered yet another setback with PayPal’s departure.
The California-based global payments company said it no longer wants to partner in Facebook’s digital currency project. “PayPal has made the decision to withdraw from further participation in the Libra Partnership for the time being. The goal is to continue to focus and move forward on our existing mission and business professionals,” the online payments giant explained.
As a reminder, “The Libra Association oversees the evolution of the network and the reserve, as well as its large-scale development. It also manages a social impact grant program to support financial inclusion globally. […] It works with policymakers to advance Libra’s mission,” explains Libra.
Facebook plan faces growing hostility
Many governments and regulators around the world have publicly expressed their doubts and fears about the Libra project.
Given the numerous data security scandals involving Facebook users, they are concerned about the lack of security, privacy and data protection.
In addition, the creation of a new digital currency to be used on Facebook’s social networks could lead to a disruption of the global financial system.
French finance minister Bruno Le Maire recently said the balance undermines “the sovereignty of states”. No private company should be able to “create a sovereign currency that could compete with state currencies”.
Facebook says its Libra cryptocurrency will be decentralised and responds to criticism
Which company could officially withdraw from the Libra project after PayPal?
While PayPal is the first Libra partner company to officially withdraw from the Libra project, many analysts wonder what other members might follow PayPal.
After all, “each organisation that has started this journey will have to make its own assessment of the risks and benefits of committing to the changes promised by Project Libra,” explained the Libra Association.
Recently, we learned that some members, such as Visa, MasterCard and Stripe, have begun to reconsider their role in managing the future digital currency. As such, they could become the next companies to withdraw from the project to preserve their reputations and avoid regulators taking too much interest in their business.
Given these new difficulties, Facebook will have to redouble its efforts to deal with the numerous criticisms from regulators and complete its project. Do you think the social media giant will know how to convince its founders not to pull out of the project and publicly support it?