• Contact Us
  • Login
Upgrade
Tech News Hero
Advertisement
  • Home
  • News
  • Gadgets
  • Social
  • Gaming
  • Mobile
  • PC
  • Internet
  • Security
  • Apps
No Result
View All Result
  • Home
  • News
  • Gadgets
  • Social
  • Gaming
  • Mobile
  • PC
  • Internet
  • Security
  • Apps
No Result
View All Result
Tech News Hero
No Result
View All Result
Home Social

Facebook’s Libra Currency Abandoned by eBay, Mastercard, Visa, Stripe

by technewshero
October 13, 2019
in Social
0
Share on FacebookShare on Twitter

Visa and Mastercard on Friday announced their departure from Facebook’s Libra project, a major setback to the social network’s plan for a worldwide digital currency.

Along with the two payment giants, several other large companies have said they’re exiting Libra. Payment processing company Stripe is stepping back, as well as e-commerce company eBay.

PayPal was the first of Libra’s big partners to leave, announcing last week it would no longer be involved.

Facebook has faced substantial criticism since the summer when it unveiled plans to create a separate, private currency system to allow users to make cross-border payments more easily. The Libra Association, based in Switzerland, was supposed to give the currency project a comfortable arm’s length distance from Facebook, which wouldn’t own Libra.

Despite those efforts, financial regulators, as well as members of Congress on both sides of the political divide, noted the privacy issues raised with the social networking company controlling a currency, while also expressing concern about how Libra could be used for money laundering like Bitcoin or Ether, other digital currencies. Even President Donald Trump weighed in, tweeting that Facebook should be subject to U.S. banking laws if the Libra project were to move forward.

All five departures come less than a week before the Libra Association’s official signing ceremony, which is to be held in Switzerland.

The impact of Libra’s loss of Visa and Mastercard cannot be understated. The two hold an effective duopoly over credit and debit cards in the U.S. and Europe, and are making substantial inroads into developing countries’ payment systems. Their initial agreement to join the Libra Association instantly gave Facebook’s project legitimacy. It also gave Facebook access to Visa and Mastercard’s networks, which could have given a pathway for users to convert traditional currency into Libra.

“If there was any ambition to scale Libra very quickly and make it widely accepted, they would have been able to do that through Visa, Mastercard and PayPal,” said Sanjay Sakhrani, a payments industry analyst at the investment bank Keefe, Bruyette & Woods. “Now it’s going to be a bigger challenge.”

But both Visa and Mastercard made it clear from the onset that their interest in Libra was at least partly out of curiosity. It now appears that the regulatory and political pressure on Facebook was enough to convince a chunk of the original members to cut ties.

Visa said Friday that it would re-examine a potential membership in the Libra Association if and when Facebook is able “to fully satisfy all requisite regulatory expectations” in its development of Libra — a sign that the regulatory and political hurdles Libra is facing were becoming too much to bear.

Facebook CEO Mark Zuckerberg is scheduled to appear in front of the House Financial Services Committee later this month to discuss Libra. That committee is chaired by Rep. Maxine Waters, D-California, who has been an ardent critic of Libra from its onset.

“Visa’s continued interest in Libra stems from our belief that well-regulated blockchain-based networks could extend the value of secure digital payments to a greater number of people and places, particularly in emerging and developing markets,” the company said.

Gartner analyst Avivah Litan said that while the defections are “a big setback” for Facebook and Libra, they won’t kill the project.

“It’s not the end of the effort, it just becomes much more contentious,” she said.

With the recent departures, Libra’s membership now consists mostly of venture capital firms and nonprofits. Uber, Spotify, and Lyft were still listed as members on Friday, and none of them responded to requests for comment. Vodafone, the Europe-based telecommunications company that has a substantial presence in Africa and has specialisation in mobile payments, was also still listed as a member.

After PayPal’s departure last week, Facebook did not waver in its support of Libra and is unlikely to do so, at least in the immediate future. The company has hired several Washington lobbyists to convince politicians and regulators to green light the project.

In a series of tweets, Libra co-creator David Marcus was not backing down either, despite Visa and Mastercard’s departure.

“The pressure had been intense (understatement), and I respect their decision to wait until there is regulatory clarity for Libra,” Marcus said.

Previous Post

These are the 29 countries vulnerable to Simjacker attacks

Next Post

AI-based firefighter safety startup Prometeo wins IBM Call for Code Challenge – TechNewHero

technewshero

technewshero

Related Posts

Are WhatsApp and Jio Cooling Off on Payments Partnership?
Social

Are WhatsApp and Jio Cooling Off on Payments Partnership?

by technewshero
January 13, 2021
TikTok US Ban: Trump Administration Appeals Federal Order Blocking App Restrictions
Social

TikTok US Ban: Trump Administration Appeals Federal Order Blocking App Restrictions

by technewshero
January 14, 2021
From Zoom to Quibi: Tech Winners and Losers of 2020
Social

From Zoom to Quibi: Tech Winners and Losers of 2020

by technewshero
January 15, 2021
Walmart Partners With TikTok to Sell Merchandise While Livestreaming
Social

Walmart Partners With TikTok to Sell Merchandise While Livestreaming

by technewshero
December 21, 2020
Twitter to Finish Delayed Fleets Rollout by November 20, Product Lead Kayvon Beykpour Says
Social

Twitter Verification Policy Revamped, Will Be Implemented on January 20 Next Year

by technewshero
December 21, 2020
Next Post

AI-based firefighter safety startup Prometeo wins IBM Call for Code Challenge – TechNewHero

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Most Popular

AWS partners with Kenya’s Safaricom on cloud and consulting services – TechNewHero

February 28, 2020
As losses expand, Asana is confident it has the ticket for a successful public listing – TechNewHero

As losses expand, Asana is confident it has the ticket for a successful public listing – TechNewHero

December 14, 2020

Get £75 cashback with Plusnet’s new Black Friday fibre broadband deal

November 20, 2019

Browse by Category

  • Apps
  • Gadgets
  • Gaming
  • Internet
  • Mobile
  • News
  • PC & Laptops
  • Security
  • Social
Tech News Hero

© 2020 Tech News Hero.

No Result
View All Result
  • Home
  • Landing Page
  • Buy JNews
  • Support Forum
  • Contact Us

© 2020 Tech News Hero.

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?