Facebook`s digital currency project Libra, a move to launch its own digital currency hits a road block as major online payment service providers withdrew their support from the project.
In June 2019, Facebook announced that it was all set to launch its own digital currency with a view to helping millions of people make online payments even without having an active bank account. It was supposed to be backed up by a digital wallet Calibra and a digital currency Libra with a view to reduce market volatility.
Facebook also revealed formation of 28 member Libra association which included members from major online payment service providers and NGOs led by Facebook subsidiary Calibra. Most of these payment service providers includes PayPal, Stripe, MasterCard, VISA etc.
Libra loses support from most of the online payment service providers
PayPal was the first payment service provider and a Libra association member to move out last week.This was a big setback since it happened just a week before the inaugural meeting of Libra Association Council. Ebay and stripe also pulled themselves out of the group much like the Latin American payment company Mercado Pago did.
Later Mastercard and VISA also reported that they will be pulling their hands out of this project while commenting that they would continue to work with the group in future projects. Mercado Pago said that in the absence of the greater clarity of the application and privacy related to the new currency, it remains away from the group.
Challenges Faced by Libra from regulators and lawmakers:
From the beginning, Facebook`s digital currency project Libra project had faced challenges from officials and lawmakers related to the chances of money laundering used for unlawful activities facilitated by digital currency. French and German official threatened to block the services in Europe much to the support of a regulated currency instead. Concerns are also being raised by legislators and regulators in US: Representative Maxine Waters(chair of
House Financial Services Committee) has demanded that the project is halted for review with FB CEO Mark Zuckerberg where he is supposed to testify before her committee this month.