Paypal is allegedly reconsidering its involvement with Facebook’s cryptocurrency Libra. As it was reported earlier this week, other Libra Association members like MasterCard and Visa are also considering dropping their support due to the regulatory scrutiny that the cryptocurrency has faced so far.
28 Libra Association members were invited to a meeting in Washington yesterday to discuss the concerns regarding Libra regulation. According to an unnamed source, Paypal representatives were not in attendance, allegedly since it “didn’t seem that there was a lot of pre-work done with regulators” as well as fear for the regulatory scrutiny that might “bleed into their [Libra backers] businesses”.
In a Wall Street Journal report that talked about MasterCard and Visa backing out of Libra because of regulatory hostility, the lack of transparency on Facebook’s side as to how its cryptocurrency would be protected against illicit activity was also mentioned.
Libra Lead David Marcus denied that Libra’s security protocol hadn’t been fully disclosed in a series of tweets dismissing the WSJ claims as “untrue”. Marcus stated that the members of the Libra Association would be formalized within the next few weeks and that as a company they are “confidently working through the legitimate concerns that Libra has raised.”
It is still unknown what damage the backing out of big companies that provided the Libra Association with legitimacy could cause in the development of the cryptocurrency, although things seem to be calm in the company. In a transcript of leaked tapes containing conversations between Facebook CEO Mark Zuckerberg and his employees, it is stated by Zuckerberg that the regulatory hurdles were “kind of expected” as “finance is a very heavily regulated space”, and that they would have to address every issue related to regulation before Libra’s launch, without any signs that the development of the cryptocurrency would be stalled.