Earlier this year Facebook announced a new digital currency it would be working on called Libra. Facebook announced that it would be working with a collective of companies called the Libra Association to work on the Libra project. From the day the announcement was made the digital currency project has been under a lot of scrutiny and has been under a lot of attacks.
This has caused many of the project backers to pull out. More and more of the Libra project backers are backing out. Very recently, companies like eBay, Mastercard, Stripe and Visa backed out from the project. Their announcement comes days before the remaining backers are set to meet in Geneva to discuss the project’s future.
More Backers Drop Out from Facebook’s Libra Project
Companies like eBay, Stripe, MasterCard and Visa are the latest companies to drop out from Facebook’s Libra Project. According to eBay and Stripe who spoke to The Financial Times, though Libra has potential, neither, in good faith, could continue their backing. eBay stated that they respect the vision of the projection but they have decided not to move forward as a founding member. They will be working on their own native offering for its customers.
Stripe stated that though it has a lot of potential to make online commerce more accessible for people around the world, the project is not yet there. They stated that they will follow the progress closely and are open to work with the Libra Association in its later stage.
MasterCard, Visa and PayPal have also withdrew from the Libra project. According to the sources, MasterCard, Stripe and Visa reconsidered their involvement after they received emails from the Senate Banking Committee. The emails urged them to “carefully consider how your company will manage” the Libra project’s risks.
Asides the companies, the projects head of product, Simon Morris has also departed the project.
Facebook’s Digital Currency Under Attack
The project has been under a lot of attack lately, it is currently under a lot of legal pressure from regulators and politicians. Regulators and politicians have cited money laundering concerns and worries about widespread financial stability. Some have tried to pause the rollout of the digital currency while some have requested it be cancelled altogether.
On the 23rd of October, Mark Zuckerberg will be speaking in front of the House Financial Services Committee. He would speaking to them to try to tame their fears concerning the digital currency.
What is Libra?
According to Facebook, It is a “global currency and financial infrastructure.” It is basically a digital asset built by Facebook and it is powered by a new Facebook-created version of blockchain. The cryptocurrency allows users to exchange fiat currency for Libra for use in online transactions. With the digital asset, users don’t require a bank account or credit card. All they need to do is convert money into or out of Libra to us it.
According to Facebook, they launched this digital asset because there are about 1.7billion people all over the world who don’t have access to a bank account. They plan to use this digital asset to reach them all. According to Facebook, the goal of this digital asset is to eliminate transaction fees. It will create a universal payment system which is capable of quickly transacting payments around the world.