On Friday, Libra, the official digital currency of Facebook Inc., suffered severe setbacks as companies like Visa Inc. and MasterCard stepped back from the association, which was behind the currency. Both the companies announced their decision to leave the group on Friday afternoon. Following the event, other major companies like Mercado Pago, Stripe Inc., and EBay Inc. also left. Last week, PayPal Holdings Inc. exited the association as regulators continued to show concern.
All the major payment companies left Libra Association without any remaining members to help turn their currency into Libra and facilitate transactions. Other nonprofit groups and remaining association members mainly include technology, telecommunications, blockchain, and venture capital companies.
Visa Inc. said in a statement, that they have decided to not join the Libra Association. The company will be evaluating the decision to rejoin the association on multiple factors such as the Libra Association is capable of fully satisfying all requisite regulatory expectations.
Dante Disparte said in a statement that despite all the setbacks, Libra will be going ahead with the initial plan to formally charter the association.
In June 2020, Facebook Inc. announced its plans to launch its digital currency, Libra, with other Libra Association members. Soon after that, the currency faced scrutiny from global regulators, raising a lot of questions that are yet to be answered by the Libra Association members.
Last month, countries like Germany and France banned Libra from operating and instead backed the development of a public cryptocurrency.
Jerome Powell, Chairman of the U.S. Federal Reserve, has suggested that the currency cannot advance without addressing some serious stability concerns such as consumer protection, financial stability, user privacy, and money laundering.
Mark Zuckerberg, Facebook Chief Executive, is scheduled to testify before the U.S. House Financial Services Committee on October 23. The chair of the panel, Representative Maxine Waters, has repeatedly as Facebook to shelve the project.