Facebook’s Libra cryptocurrency has been dealt a major blow as partners eBay, Visa, Mastercard, and Stripe announced in quick succession Friday that they are withdrawing from the project.
“Visa has decided not to join the Libra Association at this time. We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations,” Visa said in a statement on Friday.
EBay, Mastercard and Stripe also said Friday that they are withdrawing from Libra, according to multiple reports.
Libra co-creator David Marcus said he remains optimistic despite the latest news.
“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,” Marcus said on Twitter.
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 Switzerland-based Libra said that it is still planning to forge ahead despite the serious setback. The organization had been planning to launch the cryptocurrency in 2020, though it’s unclear if Facebook is still on track to meet that goal.
“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,” a Libra spokesperson told CNBC.
Facebook has faced ample criticism since Libra was formally announced this year, with two Democratic senators recently urging Libra partners this week to drop out, saying they don’t have confidence that Facebook is up to the task of overseeing the project.
President Donald Trump tweeted is skepticism of Libra in July, saying Facebook’s cryptocurrency will likely have little dependability.
….Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National…
— Donald J. Trump (@realDonaldTrump) July 12, 2019
The European Union also began an official investigation into the blockchain-based Libra on concerns over competition.
Libra was comprised of nearly 30 backers and has generated a mountain of publicity as Facebook’s first foray into cryptocurrency.
But the dominoes started falling last week when PayPal said it was withdrawing from the organization.
Facebook had planned Libra to be used primarily on smartphones, allowing people around the world to transact without having traditional bank accounts.