The road so far has not been an easy one for Facebook since they officially entered the cryptocurrency industry with the launch of their Libra white paper. The upcoming token has seen pushback from various government officials, with allegations ranging from its possible use for money laundering to its possible undermining of local economies. While Facebook’s lobbying team has been hard at work meeting with the leaders from across the globe trying to clear the regulatory path ahead of the token launch, the journey has been anything but smooth so far and there are likely still more challenges to come.
On October 3, 2019, it was reported that PayPal, which was a member of the Libra Association, the body that governs the libra token, did not attend the meeting for the backers of the token and then there were rumors of impossible exit on the part of PayPal.
Unfortunately for Libra, it was confirmed by PayPal on October 4, 2019, that they have exited the Libra Association following the speculation.
“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,” their statement said.
It was reported that the biggest issue that PayPal had with Facebook was that not enough work was done ahead of the white paper launch to take care of regulatory issues and the fact that they are still struggling with these issues months after the white paper launch might be scaring off some of the supporters and that other Libra association members will exit in the near future.
“It doesn’t seem that there was a lot of pre-work done with regulators. [Payments] companies don’t want that [regulatory scrutiny] to bleed into their businesses,” a source close to the situation stated.
Allegedly, Stripe, Visa and MasterCard as well as some of the other Libra association members are having cold feet mostly because they were worried about their association with Libra potentially harming their relationship with regulators which could, in turn, harm their businesses on the long run.