Visa, Mastercard, PayPal and Stripe are reportedly balking at officially committing to the Facebook-led Libra stablecoin project, according to a new Bloomberg report.
The four global payments companies, all of which are key participants in the traditional movement and transmission of money in the regulated financial markets, seek to maintain positive relationships with key regulators who have expressed serious reservations about Libra. These regulators are critical to the successful operation of money transmission and payments businesses. Visa and MasterCard are the No. 2 and 3 general purpose payment card networks in the world, according to The Nilson Report.
According to Bloomberg, executives at the payments companies have grown concerned with Facebook's handling of data and privacy issues. The executives also believe that Facebook exaggerated the level of support and comfort exhibited by regulators globally. Since Libra was announced, the blowback from government officials across the globe has been near universal, from Maxine Waters in the United States to finance ministers in France and Germany.
The four global payments companies' hesitation comes as Facebook seeks to elevate the non-binding support exhibited by Libra Association members during the announcement of the project in June to a more formal commitment. Despite the fact that signing the updated paperwork won't commit the prospective Libra Association members to pay the $10 million Libra project investment, it is reportedly still being met with hesitation.
Facebook is still hoping to move forward with official signing of the Libra Association's charter as soon as Oct.14 in Switzerland, where the non-profit Association charged with managing the Libra payments network and monetary policy would be headquartered, per Bloomberg.
Meanwhile, technology development of Libra is moving along faster than expected, per the report. Facebook's digital wallet product Calibra and four other Libra Association members are running a test network of nodes and sending test transactions.
Despite the technical progress, the Libra project remains in a fog of uncertainty as Libra organization members rethink their commitments amidst the monumental, unprecedented regulatory pushback.