PayPal recently announced its withdrawal from Facebook cryptocurrency. Where is this heading for Libra amidst recent scrutiny and criticisms from lawmakers?
According to a recent report from Bloomberg, PayPal has announced its withdrawal from the Facebook cryptocurrency project. The announcement which came out officially on Oct. 4th is without a doubt a big blow to Facebook’s efforts to build their own digital cryptocurrency payment network.
Although it isn’t exactly clear why PayPal is pulling out from Facebook cryptocurrency, it is possible that recent increasing scrutiny and concern from lawmakers and the general public could have played a role.
Facebook has been associated with a number of privacy scandals which many of its users are still yet to recover from. In fact, there have been several calls from lawmakers for the company to suspend the Facebook coin project.
There’s also concern over how the social media giant is going to tackle criminal activities (such as money laundering) commonly associated with using cryptocurrency. Their negligence over the backlash Facebook Cryptocurrency Libra has received in recent times could also be responsible.
It should be recalled that Facebook had earlier announced in the middle of the year that they would be partnering with other tech companies to build Facebook cryptocurrency. According to the company, the cryptocurrency will provide a highly secure payment platform with minimal friction and location independent. The Facebook Libra Association was consequently formed to oversee the project which is supposed to be completed sometime in 2020.
Altogether, there were 28 founding members on the list which included PayPal.
PayPal Pledges Continuous Support for Facebook Libra’s aspirations
Despite withdrawing from the Facebook Cryptocurrency Libra Association, PayPal has made it clear that it would continue to support Libra’s aspirations and hope they would get together sometime in the future. The spokesperson for the company also said that they would continue to work with Facebook as always and focus on expanding their services to ensure greater transparency and access to more people.
Meanwhile, in the light of heightened scrutiny from authorities, many supporters of the Facebook cryptocurrency have refused to anything worthy of the currency in public. According to recent reports from the Wall Street Journal, this includes top tech giants like MasterCard and Visa. In fact, there are rumors that MasterCard may also be pulling out from the association soon.
Just recently, Tim Cook came out publicly to condemn the Facebook payments coin. According to the Apple CEO, the move is just another one of Facebook’s tactics to gain power.
It should be noted that the chairman of the Facebook Cryptocurrency Libra project, David Marcus was apprehended by lawmakers earlier in July, and as expected, it didn’t come out well for the former PayPal boss.
Libra Remains Committed to Build Facebook Cryptocurrency
Despite all the criticisms and scrutiny that Facebook Cryptocurrency Libra is facing, the association has made it clear that they remain committed to their goal. And they are working diligently to ensure things work as planned. This was gathered from a statement released by the association’s head of policy and communications, Disparte Dante.
It was also said that he expressed his disappointment over PayPal’s decision to back out from the project stressing that they lacked the heart to stick with Facebook Cryptocurrency Libra till the end.
According to Disparte, a project of the magnitude of Facebook Cryptocurrency Libra was never going to fall through easily knowing fully well what they are out to accomplish. He further added that challenges were expected as Facebook cryptocurrency will ultimately restructure the financial system to focus more on the people who own the money rather than the intuitions holding it for them.
Wrapping it Up – What is the future for Facebook Cryptocurrency Libra?
PayPal withdrawal is definitely a big hit but it definitely doesn’t look like the end for Facebook Cryptocurrency Libra. Unfortunately, PayPal may not be the only company to disassociate itself from the high profile cryptocurrency project.
If the recent reports from the Wall Street Journal were anything to go by, then Libra would soon be losing another two financial players – MasterCard and Visa. It is difficult to imagine what the future would look like for Facebook cryptocurrency. The recent move by the US to block the project is also raising a lot of brows.