Visa and Mastercard pull out of Facebook currency project

Visa and Mastercard pull out of Facebook currency project

Visa and Mastercard have announced their departure from Facebook’s Libra project in a potentially fatal blow to the social network company’s plan for a worldwide digital currency.

Along with the two payment giants, several other large companies have said they are exiting Libra.

Payment processing company Stripe said it is stepping back, as well as online auction company eBay.

PayPal was the first of Libra’s big partners to leave, announcing last week it would no longer be involved.

Facebook faced substantial criticism over its plans to create a separate, private currency system to allow cross-border payments.

The Libra Association, based in Switzerland, was supposed to give the currency project a comfortable arm’s length distance from Facebook, which would not own Libra.

Despite those efforts, financial regulators, as well as members of Congress on both sides of the political divide, noted the privacy issues raised with the social networking company controlling a currency, while also expressing concern about money laundering.

President Donald Trump tweeted that Facebook should be subject to US banking laws if the Libra project were to move forward.

The impact of Libra’s loss of Visa and Mastercard cannot be understated. The two hold an effective duopoly over credit and debit cards in the US and Europe, and are making substantial inroads into developing countries’ payment systems.

Their initial agreement to join the Libra Association instantly gave Facebook’s project legitimacy.

But both companies made it clear from the onset that their interest in Libra was at least partly out of curiosity.

It now appears that the political pressure on Facebook to drop the project was enough to convince a chunk of the original members to cut ties.

The Libra Association said in a statement that it is “focused on moving forward”.

More on this topic

Mark Zuckerberg defends meetings with US conservativesMark Zuckerberg defends meetings with US conservatives

Facebook officially launches digital currency Libra despite defectionsFacebook officially launches digital currency Libra despite defections

US presidential candidate targets Facebook policy with ‘false’ Zuckerberg adUS presidential candidate targets Facebook policy with ‘false’ Zuckerberg ad

Facebook paid £28.5m in UK tax despite £1.65bn revenueFacebook paid £28.5m in UK tax despite £1.65bn revenue

More in this Section

EOn to cut between 500 and 600 jobs in UKEOn to cut between 500 and 600 jobs in UK

How does the Pixel 4 compare to the iPhone 11 and Samsung Galaxy S10?How does the Pixel 4 compare to the iPhone 11 and Samsung Galaxy S10?

Transport and Brexit top worry listTransport and Brexit top worry list

Limerick waste-to-energy firm sues heat exchange system supplierLimerick waste-to-energy firm sues heat exchange system supplier


Lifestyle

To instantly power up your look, veer towards the hard shoulder.Bold shoulder: How to instantly power up your look

Plums are a wonderful autumn fruit, useful for all sorts of recipes both sweet and savoury. In Ireland we are blessed with wonderfully sweet plums.Currabinny Cooks: Juicy plums work for both sweet and savoury dishes

The rise of home skincare devices doesn't mean that salons and clinics no longer serve a purpose.The Skin Nerd: Don’t try this at home — new treatments in the salon

Millions of gamers watched Fortnite reach breaking point on Sunday night, with ten seasons of mysterious storyline culminating in meteors hitting the island and everything disappearing.GameTech: End of beginning for Fortnite as Chapter 2 finally goes live

More From The Irish Examiner