As the relentless regulatory scrutiny of Libra continues, the major players quit Libra. On Friday, Mastercard and Visa made an official announcement about their association with Facebook’s Libra. And the news is not good.
This happens exactly a week after PayPal bid goodbye to Libra
, an ambitious project. Following suit eBay, Stripe and Mercado Pago exited the Libra’s support group.
Facebook’s stablecoin seems to be experiencing the domino effect of PayPal’s withdrawal. Consequently, its support group currently does not include any major payment company.
Is that it for the coin?
Undoubtedly, being under the regulatory knife for so long is no fun. But Facebook’s project continues to forge ahead as assured by Dante Disparte. He is currently the head of policy and communication of the Libra Association.
According to Dante, the members will keep changing over time but the team’s focus is to march ahead. He added that Libra will keep on building stronger associations with major players.
Likewise, David Marcus, head of Libra, shared a word of caution. He said these withdrawals will not determine the fate of the project. The impact is going to have a short-term effect. He tweeted: “I would caution against reading the fate of Libra into this update. Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.”
What is the loss?
With Mastercard, Visa, eBay, PayPal, Mercado Pago and Stripe off its support list, Libra loses notable monetary support. To begin with, each member of the Association had to contribute $10 million to the development of the project.
Thus, the coin lost $60 million in just a weeks’ time from its monetary pool.
However, there is another unspoken aspect of the setback. The partnership with payment service providers was a strategic move. In the long run, Libra aimed to take advantage of their massive user bases. Now, it is only left with a handful of supporters. And they are venture capitalists, telecommunication giants, technology companies and nonprofit groups.
Last month France and Germany pledged to block the stablecoin’s operations in Europe. Concurrently, the U.S. is already giving Libra a hard time. Thus, its lobby seems to be losing strength all across the globe.