Facebook learned it has one less supporter of its planned cryptocurrency on Friday when Paypal announced it would no longer be counted among the members of the Libra Association.
Paypal released a prepared statement that explained it would no longer be a part of the Libra association but would focus more of its efforts on advancing its own mission to bring financial services to populations that are presently underserved. Paypal says it is still supportive of the Facebook mission and is sure there will be plenty of opportunities for the two companies to partner on a variety of projects in the future.
Dante Disparte is the head of communications for the Libra Association. Disparte says the association understands how difficult “this type” of change is for some companies. He went on to say that each company must make its own decision regarding the change that is certain to come with Facebook’s Libra coin.
The June announcement of the planned cryptocurrency by Facebook was met with criticism from many directions. Global regulators, senior members of the Congressional Finance Committee, industry insiders, and former lawmakers all openly questioned Facebook’s motives with the coin.
Jerome Powell, the Chairman of the Federal Reserve, says consumer protection, privacy, money laundering, and financial security are all issues that need to be addressed with Libra. He also said the feds would launch a group to examine these issues.
Democratic Representative Maxine Waters, House Financial Committee Chairwoman, said in June the progress of the coin should be delayed until Congress could get a better handle on what is happening. She also promised Congress would act more aggressively regarding the coin.
Facebook has attempted to alleviate the concerns of lawmakers by explaining that control of the coin would not belong to the social media giant alone.
The Libra Association is comprised of 28 companies that are expected to govern the Libra coin along with Facebook. Each organization is required to invest $10 million toward the launch of the project but so far, no investments have been made.
There are fears that the public defection by Paypal could mean trouble for the Libra Association.
There have already been reports that partners such as Mastercard, Visa, and the Wall Street Journal were beginning to second guess their involvement with the association due to the backlash.
Lawmakers in Congress are hoping to get the top executives at Facebook in Washington to give their testimony on Libra.