PayPal exits Facebook’s cryptocurrency organisation Libra Association

PayPal has decided to “forgo further participation at this time” in the Libra Association, a non-profit organisation headquartered in Geneva led by Facebook to build global cryptocurrency Libra. In lieu of this, the Libra Association has posted a series of cryptic messages and teased upcoming updates on Twitter.

In a statement to Marketing, PayPal said it made the decision to focus on advancing its existing mission and business priorities to “democratise access to financial services for underserved populations”. However, the company said it remains supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future. The spokesperson added that Facebook has been a “longstanding and valued strategic partner” and PayPal will continue to partner Facebook  in various capacities.

The exit of PayPal does not seem to worry the association, which revealed on Twitter that it would be announcing details of the 1,500 entities that have indicated “enthusiastic interest” to participate at the first Libra Council meeting in about a week’s time.

Furthermore, Libra Association hinted in its tweets that the project is not for everyone stating that the journey to build a generational payment network is “not an easy path” and it recognises that “change is hard”. It also urged each organisation that started on the journey to make its own assessment of risks and rewards of “being committed to seeing through the change that Libra promises”.

Earlier in September, the Libra Association announced that it would be pursuing a license as a payment system with lead supervisory authority under the Swiss Financial Market Supervisory Authority (FINMA). In this context, it has submitted a request for a ruling to clarify the regulatory status of the Libra Association and the Libra coin. In the statement, the Libra Association promises to house a diverse group of member organisations spanning technology, financial services, social impact organisations and venture capital, among others, when fully developed.

Facebook announced the formation of Calibra, a Facebook subsidiary whose goal is to provide financial services using the Libra Blockchain, in June. The first product Calibra intends to introduce is a digital wallet for Libra that will be available in Messenger, WhatsApp, and as a standalone app. The Calibra wallet will let users send Libra to almost anyone with a smartphone, similar to how they might send a text message.

It has since faced strong resistance and distrust from regulators, prompting Facebook head of Calibra David Marcus to stress that Facebook will not offer the Libra digital currency until it has fully addressed regulatory concerns and received appropriate approvals.

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