Visa, Mastercard, eBay, Stripe, and Mercado Pago have all withdrawn from the Libra Association, dealing a major blow to Facebook’s plans for a distributed, global cryptocurrency. The withdrawals were first reported by the Financial Times and Bloomberg.
A Visa spokesperson told The Verge. “Visa has decided not to join the Libra Association at this time,” the spokesperson said. “We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations.”
The withdrawals leave Libra with no major US payment processor, a serious issue for the fledgling project. They also come just one week after PayPal (eBay’s former subsidiary) withdrew from the association.
The first official meeting of the Libra Council is in just three days, scheduled for October 14th in Geneva. That meeting will likely result in more specific commitments from all the members involved, which may have inspired some of the recent defections. Still, the departures leave the project in a precarious place as Libra hopes to move beyond initial criticisms of the project.
“We highly respect the vision of the Libra Association,” eBay said in a statement. “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.”
Stripe gave a similar explanation for its withdrawal. “Stripe is supportive of projects that aim to make online commerce more accessible for people around the world,” the company said. “Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage.” Mastercard did not immediately respond to a request for comment.
In response, Libra Association policy chief Dante Disparte thanked the companies for their ongoing support of the organization’s mission.
“We are focused on moving forward and continuing to build a strong association of some of the world’s leading enterprises, social impact organizations and other stakeholders,” Disparte said. “We look forward to the inaugural Libra Association Council meeting in just 3 days and announcing the initial members of the Libra Association.”
The remaining Libra members are facing growing pressure from governments and regulators, many of whom see the project as a threat to the existing financial system. On Wednesday, two Democratic senators urged Visa, Mastercard, and Stripe to reconsider their involvement with Libra, saying it could have significant regulatory consequences for any payment processor involved.
“If you take this on,” the letters read, “you can expect a high level of scrutiny from regulators not only on Libra-related activities, but on all payment activities.”
In response to the news, Libra chief David Marcus, a former president of former Libra Association, PayPal, conceded the news was not “great in the short term,” but “liberating” to “know that you’re on to something when so much pressure builds up.” Marcus also casts the news of Mastercard and Visa’s withdrawal from the project as the two payment giants simply waiting until there’s proper “regulatory clarity” on Libra.
I would caution against reading the fate of Libra into this update. Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.— David Marcus (@davidmarcus) October 11, 2019
Update, October 11, 4:14PM ET: Updated with comment from the Libra Association.
Update, October 11, 4:34PM ET: Updated with comment from Visa.
Update, October 11, 5:13PM ET: Updated with news that Mercado Pago is also leaving the association.
Update, October 11, 6:20PM ET: Updated with comment from Libra chief David Marcus.