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Payment giants back out of Facebook's Libra cryptocurrency, following PayPal

Lily Puckett
AFP/Getty Images

Mastercard, Visa, and eBay have all pulled out of Libra, Facebook’s increasingly embattled cryptocurrency project.

The major financial institutions follow PayPal in withdrawing from the Libra Association. The payments firms Mercado Pago and Stripe have also pulled out, leaving the project with only one of six payments-related firms who were originally involved.

The withdrawals also leave the cryptocurrency project with no major US payment processor.

A spokesperson for eBay said: “eBay has made the decision to not move forward as a founding member. At this time, we are focused on rolling out eBay’s managed payments experience for our customers.”

A spokesperson for Visa also left open the potential for a shift, saying, “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.”

Libra has been criticised by regulators and politicians, who have noted, among other things, the risk of the service being used for money laundering. Representative Maxine Waters, who chairs the House Financial Services Committee, called for a halt on the project in July.

“Because Facebook is already in the hands of over a quarter of the world’s population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action,” she and four other Democrats wrote in a statement at the time.

“During this moratorium, we intend to hold public hearings on the risks and benefits of cryptocurrency-based activities and explore legislative solutions. Failure to cease implementation before we can do so, risks a new Swiss-based financial system that is too big to fail.”

Facebook chief executive Mark Zuckerberg will appear before Congress on 23 October to justify Libra and its planned roll-out.

His appearance is scheduled a little over a week after the first official meeting of the Libra Association Council, which will take place on 14 October in Geneva.

“We look forward to the inaugural Libra Association Council meeting in just three days and announcing the initial members of the Libra Association,” said a spokesperson for the Council.

David Marcus, Facebook’s lead executive on the Libra project, wrote on Twitter he “would caution against reading the fate of Libra into this update.”

“Of course, it’s not great news in the short term, but in a way it’s liberating,” the tweets continued. “Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.”

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Facebook Libra cryptocurrency loses PayPal support