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Cascade defections at Libra, Facebook's digital currency project

2019-10-11T22:13:15.447Z

Cascade defections at Libra, Facebook's digital currency project



San Francisco (AFP)

Visa, Mastercard, eBay and Stripe announced on Friday that they were pulling out of Libra, carrying a new blow to Facebook's digital currency project, set for mid-2020, but which faces increasing opposition from regulators and is facing the defection of its partners.

Visa and Mastercard credit card issuers, eBay's e-commerce platform and Stripe payment services confirmed to AFP that they were abandoning the project a week after PayPal, another Facebook partner in the deal.

"We will continue to evaluate the situation and we will make our ultimate decision based on a number of factors, including the ability of the association to fully meet all regulators' expectations," said a spokesman. -parole of Visa.

Libra is supposed to offer a new payment method outside traditional banking channels, making it easy to buy goods or send money as easily as an instant message.

At the same time, the four companies renewed their support for the guiding principles of the project, such as the democratization of access to financial services or the development of cryptocurrencies.

"The membership of the association can expand and change over time, but the founding principles of Libra's governance and technology, as well as the open nature of the project, help ensure the resilience of the Libra payment network. ", reacted Dante Disparte, Libra association.

"The trip will be long and difficult," he admitted last Friday, after the withdrawal of PayPal, adding then that it took "audacity and a certain moral strength to undertake a project as ambitious as Libra."

- "If you stay in the project ..." -

The social network and its partners are under increasing pressure from the authorities, who are worried about potential malicious uses of the currency, and point to the bad reputation of the Californian giant of the internet in terms of confidentiality and protection of personal data.

Facebook "did not provide a clear plan on how to prevent Libra from facilitating the financing of criminal and terrorist activities, destabilizing the global financial system, interfering with monetary policies or exposing consumers to risks that affect today as professional investors, "wrote Brian Schatz and Sherrod Brown, two US senators, in a letter sent Tuesday to Stripe, Visa and Mastercard, published by the specialized website The Verge.

"If you stay in the project, you can expect extensive scrutiny from regulators not only of Libra-related payment activities, but also of all your payment activities," they continue.

Facebook entrusted the management of the currency to the Libra association, a consortium of partners who also had to invest at least $ 10 million in the project each.

The US Treasury has sent requests to them for a full review of their anti-money laundering programs, according to a source close to the organizations concerned.

"We are looking forward to holding the inaugural meeting of the board of the Libra association in 3 days, and to announce the first members," concluded Dante Disparte.

Mark Zuckerberg, Facebook's boss, is due to be heard on the project on Oct. 23 by a US parliamentary committee.

© 2019 AFP

Source: france24

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