PayPal which was one of the first companies to join Facebook’s planned cryptocurrency network becomes the first to pull out of the alliance waiting to launch Libra, Facebook’s digital currency.
PayPal made this announcement on Friday but didn’t give details for pulling out. Facebook revealed in June, its plans to launch Libra, with the banking of some credible financial institutions including PayPal, Mastercard and Visa. However, the launch of the cryptocurrency network has been delayed due to regulatory concerns that have been raised worldwide. France and Germany pledged to block it from Europe once it launches.
PayPal didn’t say specifically what prompted its decision; it however said it remained supportive of the initiative but wants to focus on its core businesses. The financial institution was one of the members of the Libra Association, a group of 28 companies, alongside other non-profits helping to develop the crypto company.
Libra association responded to PayPal’s withdrawal that it was aware that reconfiguring the financial system would be hard and that commitment to the mission was very key. “We are better off knowing about this lack of commitment now,” it said in a statement.
In June, when Libra first revealed its plan to unveil, it said that people would be able to make payments with the currency through its own apps, as well as on instant messaging service WhatsApp and that the platforms would be protected. Facebook also said that from next year, users will be able to buy Libra through its platforms and store in a digital wallet called Calibra.
Facebook also said that Libra would be managed independently and backed by real assets and that making payment with it would be very easy. It said its target were the people especially women who do not have bank accounts. It said the issue with having no bank accounts affected people in developing countries.
This will not be Facebook’s first attempt with cryptocurrency. A decade ago, it launched Facebook Credits, a virtual currency that enabled users to purchase items in apps. It however, ended that project after about two years, when it failed to gain traction.
Aside from the scepticism of regulators all over the world, the biggest test would be if people would be willing to exchange their money for a virtual currency which would be traded on platforms which have been heavily criticised for the misuse of personal data.
The Libra Association is set to hold its first meeting of its governing body on 14th October.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
