PayPal is about leaving Libra Association due to the regulatory backlash, according to the Financial Times. PayPal representatives ignored a Libra Association meeting in Washington on Oct. 3 convened for the purpose to discuss how to handle the backlash.
PayPal’s withdrawal would be a blow to Libra legitimacy. The payments company is reportedly concerned that Facebook has not adequately addressed the issue of money laundering.
“Payments companies don’t want that [regulatory scrutiny] to bleed into their businesses. PayPal might return later, but will likely not be part of Libra initially,” the insider told.
As previously reported, Financial regulators have the reputation of been critical of the Facebook crypto, which may pose a threat to global financial stability in their view. The heads of the companies are concerned about how Facebook manages the private date of its users. France and Germany have pledged to block the cryptocurrency.
Visa, MasterCard, PayPal and Stripe, that have joined Facebook Inc. as founding members of the Libra Association, are wavering over whether to officially support the crypto project. Lack of support from key payment systems can have serious consequences for Facebook, it would be difficult to persuade users to replace their national currencies with Libra.