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PayPal Withdraws Support For Facebook's Libra Cryptocurrency

digitalwallet jun19 06oct19 lt

Payments firm PayPal Holdings Inc (PYPL) decided to withdraw from the governance organization for the Libra cryptocurrency developed by Facebook (FB). But, PayPal did not provide any specific reason for the withdrawal.

The Libra Association is a 28-member nonprofit organization formed in June 2019 to oversee the cryptocurrency's creation and eventual consumer rollout.

"PayPal has made the decision to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations," PayPal said in a statement.

"We remain supportive of Libra's aspirations and look forward to continued dialogue on ways to work together in the future. Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities," PayPal said.

Dante Disparte, head of policy and communications for the Libra Association, said "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."

PayPal reportedly had begun distancing itself from the project amid increasing regulatory scrutiny.

In July, U.S. Federal Reserve Chairman Jerome Powell expressed serious concerns over Facebook's planned cryptocurrency Libra. Powell then said, "Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability."

The news about Facebook's planned cryptocurrency had come in early March. In May there were also reports about the social media giant's plan to launch the cryptocurrency-based payments in many countries by the first quarter of 2020.

Facebook confirmed in June its plans to launch its cryptocurrency Libra in 2020. It also formed a subsidiary called Calibra to run the Libra network, powered by blockchain technology.

Facebook then said it partnered with 28 companies, including financial services giant Mastercard and PayPal Holdings, tech giants Uber Technologies and Spotify Technology, and blockchain companies like Coinbase for the digital wallet service.

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