Visa, Mastercard, Stripe and eBay bail on Facebook's Libra ahead of key meeting
As regulatory pushback against Facebook's Libra cryptocurrency has accelerated, keeping the project together has become a major challenge, with Visa, Mastercard, eBay and Stripe joining PayPal in leaving the project.
The announcements Friday came ahead of a key meeting of Libra participants scheduled for Monday. Calibra, the Facebook unit supervising the project, is expected to choose a board of directors and formally announce its initial members.
The meeting is likely to take on greater importance, as the original 28 members are now down to 23. PayPal was first to depart, leaving Libra without several its potential payment industry partners. Visa had previously hedged, calling the agreement "non-binding" and saying it's waiting to see how the regulatory issue progresses before making a final commitment.
"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," Dante Disparte, head of policy and communication for the Libra Association, said in an email. "We look forward to the inaugural Libra Association Council meeting in just 3 days and announcing the initial members of the Libra Association."
In an email, an eBay spokesperson said the company is focused on rolling out eBay's managed payments experience. Stripe stressed that it is not signing on as a founding member, and left open the possibility of rejoining. "Stripe is supportive of projects that aim to make online commerce more accessible for people around the world. Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage,” Stripe said in an email.
A Mastercard spokesperson said it will remain focused on its own efforts to enable financial inclusion, and will continue to monitor Libra. A Visa spokeperson said Visa has decided not to join the Libra Association at this time. It will continue to evaluate and its ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations.
The card networks, PayPal, Stripe and eBay remove international payment scale, technology and compliance expertise from the project by pulling out of it. Stripe, Mastercard and PayPal recently received a letter from Sen. Brian Schatz, Democrat of Hawaii, and Sen. Sherrod Brown, D-Ohio, warning the companies to consider Facebook's risk before participating in the project.
"Large payment companies are wise to avoid legitimizing Facebook's private, global currency," Brown said in a statement on Friday. "Facebook is too big and too powerful and it is unconscionable for financial companies to aid it in monopolizing our economic infrastructure."
Even before PayPal, Stripe and eBay departed the project, there was word that some of the members were concerned about the regulatory pressure. Regulators and politicians in the U.S., Europe and Asia are all calling on Libra to be halted, or at least heavily regulated, mostly over concerns that Libra will circumvent central bank control over currency. Facebook has said it won't launch the project until regulators are satisfied. Facebook CEO Mark Zuckerberg is also scheduled to testify before the House Financial Services Committee later in October.