PayPal has pulled the plug on joining the Libra cryptocurrency cartel headed by Facebook.
The international payments platform has pulled out of the project in the face of hardening attitudes against the altcoin from regulators in several countries.
Libra is a co-operative of 28 – now 27 – multinational companies led by the social network, with Facebook subsidiary Calibra managing the project.
Each multinational was due to stump up $10 million to join the party.
PayPal has dropped the project without explanation.
MasterCard and Visa also have doubts
“PayPal has made the decision to forgo further participation in the Libra association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratise access to financial services for underserved populations,” the company announced in a statement.
“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.”
Payment giants MasterCard and Visa are also reportedly considering if they want to remain part of the Libra project.
Regulators in the European Union and America have already hinted that they will block Libra because they see the cryptocurrency as a bid to bypass money laundering and tax evasion laws.
Data protection concerns
The Bank of England has also warned that Libra must pass a set of high standards for trading in the UK and that the financial status of companies in the consortium would also need to pass muster.
“The resilience of the proposed Libra system would rely on the stability of not just the core elements of the Libra Association and Libra Reserve, but also the associated critical activities conducted by other firms in the Libra ecosystem such as validators, exchanges or wallet providers,” said the bank.
Governments are also worried about how Libra will handle data protection for customers.
Facebook launched the proposal in June as a digital currency for a new global payments system that would allow billions of internet users without access to a bank to buy and sell online.
The cryptocurrency would also be backed by pegging to US dollar and other leading currencies.