PayPal has become the first business to drop out of Facebook’s Libra cryptocurrency.
As one of the original members of the Libra association, PayPal did not offer details as to what prompted the decision to pull out, but did say it still remained “supportive of Libra’s aspirations”.
In an emailed statement to TechCrunch, the company said: “PayPal has made the decision to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations.
“We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future. Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.”
In response to PayPal’s withdrawal, a spokesperson for Libra Association said: “It requires a certain boldness and fortitude to take on an endeavour as ambitious as Libra – a generational opportunity to get things right and improve financial inclusion.
“The journey will be long and challenging. The type of change that will reconfigure the financial system to be tilted towards people, not the institutions serving them, will be hard. Commitment to that mission is more important to us than anything else. We’re better off knowing about this lack of commitment now, rather than later.”
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PayPal was among nearly 30 companies and non-profits backing the development of Libra. Membership to the association cost a minimal investment of $10 million in the project. Remaining members include payments company Visa, ride-hailing app Uber and humanitarian charity Mercy Corps.
Since Facebook announced its plans to launch Libra and its digital wallet Calibra, the currency has been met with criticism from regulators and governments, with France and Germany pledging to block it in Europe.
Critics have raised concerns over how the currency will be regulated and that Libra could lead to anti-competitive behaviour. Facebook has stressed that it would not control the Libra Association or currency, but would only get a single vote alongside the other remaining members.
There is also concerns over how Libra users’ data and money will be protected and the potential volatility of the currency. Facebook says that it will be independently managed and backed by real assets.
The Group of Seven advanced economies warned in July that it would not let Libra proceed until all regulatory concerns had been addressed, and Facebook CEO Mark Zuckerburg has delayed the Libra launch. The association is due to hold the first meeting of its governing body, the Libra Council, on October 14th.