Can Facebook’s Libra cryptocurrency survive the exodus?

Can Facebook’s Libra cryptocurrency survive the exodus?





After the withdrawal of seven of the 29 founding members of the Libra Association, the governing council for Facebook’s planned global cryptocurrency, the project’s fate  looks increasingly uncertain.

PayPal, Visa, Mastercard, eBay, Stripe, Mercado Pago and Brooking Holdings have backed away from participation on the Libra Association; their hands were forced when  all members met Monday in Switzerland for formalize their commitment to the project.

“In many ways, PayPal, Visa and all the others took the only decision they sensibly could take under the circumstances,” Forrester Vice President of Research Martha Bennett said via email. “Given the continued lack of regulatory engagement…and continued lack of detail on key points around Libra (the coin), governance of the network, management of the fund, etc., the risk of reputational damage was simply too great.”

Beyond those immediate concerns, there is also the potential of inadvertently being drawn into compliance violations in the future – something none of the companies that withdrew would countenance, Bennett added.

The Libra Association did not respond to requests for comment.

Industry experts and research analysts have speculated that the departures are the result of regulatory scrutiny of the cryptocurrency, especially over whether it can thwart money-laundering efforts and adhere to know-your-customer (KYC) government rules.

In separate statements after their departure, eBay and payment software provider Stripe said they “respect” or “support” the vision of the Libra Association.

“However, eBay has made the decision to not move forward as a founding member. At this time, we are focused on rolling out eBay’s managed payments experience for our customers,” the company stated.

Copyright © 2019 IDG Communications, Inc.






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