After PayPal representatives didn’t show at a Libra Association meeting on Thursday, the Financial Times reported that the company is reconsidering its involvement with Facebook’s Libra project. The payment company, which signed on as a founding member of the so-called Libra Association earlier this year, joins Visa, Mastercard, and Stripe on what seems to be a growing list of projects that are reportedly thinking of distancing themselves from Libra.
Bloomberg originally reported that PayPal, along with Visa, Mastercard, and Stripe, was “wavering over whether to officially sign on to the cryptocurrency project” earlier this week, citing anonymous sources familiar with the matter.
According to the report, the decision to reconsider stemmed from concerns over “maintaining positive relationships with regulators who have reservations about the project,” and believe that they were misled about the extent to which regulators were comfortable with the launch of Libra.
”We are very calmly, and confidently working through the legitimate concerns that Libra has raised by bringing conversations about the value of digital currencies to the forefront.”
The companies’ cold feet could be considered to be a sign of greater uncertainty around the project. However, executives working to build Libra have come forward with some messages apparently intended to sooth the public over the status of the project.
David Marcus, head of Calibra–the entity created by Facebook to provide financial services for Libra–tweeted specifically over a Wall Street Journal report on companies considering leaving the project behind: “the tone of some of this reporting suggests angst, etc…”, Facebook and Calibra are working to “very calmly, and confidently working through the legitimate concerns that Libra has raised by bringing conversations about the value of digital currencies to the forefront.”
Marcus also said that the names that have been listed as members of the Libra Association are not yet “official”–they had merely signed non-binding letters of intent to explore joining the association.
“[The] official 1st wave of Libra Association members will be formalized in the weeks to come,” he wrote, adding that “…for Libra to succeed it needs committed members, and while I have no knowledge of specific organizations plans to not step up, commitment to the mission is more important than anything else.”
Marcus had some choice words for other parts of the WSJ’s report that he felt were inaccurate:
3) The part of this article suggesting we weren’t on top of, or didn’t share detailed information about how to secure Libra and protect the network against illegal activity is categorically untrue; (worth calling BS)
EuropeFX Now Supporting PayPal DepositsGo to article >>
— David Marcus (@davidmarcus) October 1, 2019
Dante Disparte, the Libra Association’s head of policy and communications, expressed similar sentiments: in a statement, he told the Financial Times that bringing something as large as Libra into the world “is not an easy path.”
“We recognize that change is hard and that each organization that started this journey will have to make its own assessment of risks and rewards of being committed to seeing through the change that Libra promises,” he said.
The decision to reconsider stemmed from concerns over “maintaining positive relationships with regulators who have reservations about the project”
When Facebook first announced the launch of the Libra project in June, it also unveiled an impressive list of backers who had joined the Libra Association in support of the project. Uber, Stripe, eBay, Spotify, Lyft, and a number of other high-profile companies across a number of industries had signed on in addition to PayPal, Visa, and Mastercard.
Bloomberg reported that companies who wish to reaffirm their commitment to Libra and become “official” members of the Libra Association would be asked to do so in Geneva, Switzerland later this month.
In August, Congresswoman Maxine Waters (D-CA), chairwoman of the US House of Congress’ Financial Services Committee, announced that her concerns over Facebook’s plans to create its Libra cryptocurrency and corresponding network were not assuaged during a meeting with Swiss officials who said that they would regulate it.
Waters and her committee met with representatives from Switzerland’s State Secretariat for International Financial Matters, the Federal Data Protection and Information Commissioner, the Financial Market Supervisory Authority, as well as Swiss legislators who were “helpful in understanding the status, complexity, and magnitude of Facebook’s plans.”
However, Waters said that “while I appreciate the time that the Swiss government officials took to meet with us, my concerns remain with allowing a large tech company to create a privately controlled, alternative global currency.”