The president of Mastercard cited creative differences and operational problems as the main reasons why he left the Libra Association.

Current Mastercard CEO Ajay Banga reported on the aspects that motivated companies to leave the Libra Association, citing certain concerns regarding the path the project was taking towards the ideals under which it was raised .

According to information published in an interview conducted by The Financial Times, Banga said that the attitude of the directors of Mastercard towards Libra began to deteriorate when the members of the project proposed to link the Libra cryptocurrency to the Calibra wallet, which it removed that globally inclusive character that it had in the beginning.

In this regard, Banga commented:

“The project went from that altruistic idea to focusing on its own wallet. At that moment we thought: This doesn’t sound good at all.”

Mastercard had creative differences with Libra

One of the aspects that generated most rejection among the directors of Mastercard was the fact that Libra in the end did not represent that emancipatory financial alternative for the masses, since users in the end would have to exchange their assets for a fiat currency to acquire products and services, which together with the use of Calibra did not seem a decentralized alternative.

In this regard, Banga commented:

“If you get paid in Libra … that goes to Calibra, you have to go to another fiat currency to buy rice … I really don’t understand how all this works.”

Another problem pointed out by the CEO of Mastercard had to do with the lack of structure and vision for the Libra Association, especially when it came to becoming self-sustaining or earning money through its users, so he assured that it is not clear how the profit process and this left the way for it to come out in much more unpleasant ways.

Finally, Banga also expressed concerns about the lack of commitment among the members of the association in relation to KYC policies (know your client), which directly influences the controls against money laundering and data management. This could leave the door open for the currency to become a vehicle to perpetuate financial illicit.

“Muenster, Germany – April 9, 2011: A close up macro shot of a Mastercard credit card. Mastercard is one of the biggest credit card companies in the world.”

Leaving the ship

Mastercard is one of the first companies to leave the Libra Association, as the company (together with other partners) decided to follow another path due to regulatory problems linked to the new digital currency backed by Facebook.

At the same time PayPal, Visa and Stripe also announced their departure from the Libra Association, highlighting risks seen in the project in operational and regulatory matters, which did not have a satisfactory response to the pressure exerted by legislators and regulators.

Subsequently, platforms such as Booking Holdings and eBay also chose to abandon the project. Analysts suggested that in these cases there were concerns as to the possible consequences for their operating models.

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