Major Payment Firms Abandon Facebook's Libra Cryptocurrency Project
Several high-profile financial companies drop out of Facebook's Libra project amid heavy regulatory scrutiny. The exodus leaves the cryptocurrency coalition significantly weakened ahead of upcoming congressional hearings.
Multiple major financial companies, including eBay, Stripe, Mastercard, and Visa, drop out of Facebook's Libra cryptocurrency project. These departures follow PayPal's exit just one week prior, leaving the original coalition of 28 corporate backers significantly weakened. The companies state that they still see potential in blockchain networks but choose to focus on other efforts for now.
Intense scrutiny from government regulators drives this sudden exodus of payment processors. Lawmakers repeatedly question how the digital currency impacts sovereign currencies and whether the project adequately protects consumers. The departing companies express a need for the Libra Association to fully satisfy all requisite regulatory expectations before they consider participating.
PayU remains as the only payments company continuing to back the cryptocurrency as of Friday evening, while rideshare companies Uber and Lyft maintain their involvement. Libra head David Marcus cautions the public against reading the fate of the entire project based on this update. The cryptocurrency initiative faces another major test soon as Facebook CEO Mark Zuckerberg prepares to testify in front of the House Financial Services Committee later this month.