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Visa, Mastercard Reportedly Reconsidering Support For Libra

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Visa and MasterCard along with other major financial partners of Facebook's Libra cryptocurrency project may reconsider their association with the project, according to a report by the Wall Street Journal.

Visa and MasterCard are among more than two dozen financial backers of the project. Others include Coinbase, Lyft, Vodafone, eBay, Spotify, PayPal, PayU, Stripe and Uber.

However, most of them do not want to be publicly seen to be backing the project, fearing regulatory scrutiny. These companies were to invest around $10 million each in the consortium to fund the development of the coin.

Apart from being subject to significant regulatory and political scrutiny in the U.S., France and Germany also have recently pledged to block Libra from operating in Europe.

The Libra project is raising many serious concerns regarding privacy, money laundering, consumer protection and financial stability.

Facebook for long has been in news for creating its own digital currency, codenamed Project Libra, led by David Marcus, previous head of Facebook Messenger business. Libra has been touted as a rival to the world's most popular cryptocurrency Bitcon.

In May, there were reports that the social media giant registered a new financial technology company in Switzerland to focus on blockchain and payments. It planned to launch cryptocurrency-based payments in many countries by the first quarter of 2020.

Libra Networks was registered in Geneva on May 2, with Facebook Global Holdings as its stockholder. Facebook confirmed in June its plans to launch the virtual currency in 2020. It also formed a subsidiary called Calibra to run the Libra network, powered by blockchain technology.

In July, Facebook acknowledged that it was facing an uphill task in the timely implementation of its cryptocurrency initiative, according to a filing with the U.S. Securities and Exchange Commission (SEC). The company said it was facing multiple hurdles regarding regulating a new technology with no clear cut rules in the U.S. and other countries.

Facebook also admitted that its lack of significant previous experience with digital currency or blockchain technology might adversely affect its ability to "successfully develop and market these products and services."

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