Facebook’s biggest partners for its upcoming Libra payments network have backed out of the project less than four months after it was announced. Mastercard, Visa, and eBay said Friday they are dropping out of the partner group working on Libra, joining Paypal which backed out a week earlier.
Libra is a blockchain-based cryptocurrency which integrates with Facebook apps or runs as a standalone payment service. Libra is run by Calibra, a regulated Facebook subsidiary. The venture was announced by Facebook in June, with the backing of the financial services heavyweights.
Already an ambitious project Facebook will now try to meet its 2020 launch date without the help of eBay, Visa, Mastercard, or PayPal – the four largest payment providers in the world – and under the watchful eye of regulators which have already flagged several concerns with Libra.
Cocreator of Libra, and former president of Paypal, David Marcus, thanked Visa and Mastercard on Twitter for “sticking it out until the 11th hour” and suggested the decision did not mean the end of Libra.
“I would caution against reading the fate of Libra into this update,” Marcus tweeted over the weekend.
“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.”
Both Visa and Mastercard have left open the possibility of rejoining Libra in the future.
“Our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations,” a Visa spokesperson told The Wall Street Journal. A Mastercard spokesperson said “there are potential benefits in such initiatives and will continue to monitor the Libra effort”.
Facebook’s other major 2019 initiative, end to end encryption of its messaging services, is also being attacked by Australian, UK, and US government’s, which argue the changes will be exploited by child abusers who will use encryption to conceal their messages.
Australian Home Affairs Minister framed the encryption strengthening as Facebook being on the “side” of child abusers.
“You’re either on the side of vulnerable children or not,” Dutton told Which-50 earlier this month. “It is time for Facebook to pick a side.”