Much-Needed Regulatory Clarity
It gets worse for Facebook’s Zuckerberg! Following the shocking exit of PayPal last week, other payment processors and online giants have also left the controversial and Facebook-led initiative, Libra Association.
According to a recent report by the Financial Times, payment industry giants MasterCard, VISA, Stripe, and Mercado Pago have decided to cut ties with the Libra Association while online auction site eBay has also decided to step out of the association, all happening within the same week.
The reason appears to be that of a regulatory one. Facebook’s Libra coin is still yet to gain the clarity needed to give participants within its ecosystem the confidence to be part of it.
“We will continue to evaluate, and our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations.” – Visa Spokesperson, Financial Times
The other former associate members also stated similar reasons for leaving so abruptly. News of Facebook CEO Mark Zuckerberg testifying in front of Congress on October 23rd, 2019 could also be a trigger for the six companies’ shocking departure.
The news comes days before the first official association meeting, but there is information stating that members of the Libra Association are NOT official members of anything yet and are instead just members by a nonbinding letter of intent…
Facebook may have simply taken the wrong approach in gaining clarity and launching Libra. Due to its size and social impact, Facebook and Libra coin could face deep scrutiny.
“Large payment companies are wise to avoid legitimising Facebook’s private, global currency. Facebook is too big and too powerful, and it is unconscionable for financial companies to aid it in monopolising our economic infrastructure.
I trust others will see the wisdom of avoiding this ill-conceived undertaking.” – Senate Banking Committee
Another variable at play in this ongoing emergence of Libra coin is the simple fact that nobody trusts Zuckerberg and Facebook. Giving Facebook dominion over a payment network may also be causing friction within the association, but also potential users.
The next big step for the rise of Libra coin is Zuckerberg’s hearing later this month. This will likely give us a better picture of just where Facebook’s venture into cryptocurrencies goes next.
This post is for educational purposes. All information used is referenced accordingly. This is not investment advice; please always do thorough research and only invest what you are willing to lose, especially in times of uncertainty.