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Facebook’s Libra Project Struck Blow After Mastercard, Visa Exit

Oct. 11, 2019, 7:51 PM; Updated: Oct. 11, 2019, 9:00 PM

Facebook Inc.’s effort to create a cryptocurrency was dealt a blow on Friday after several key partners, including Mastercard Inc., Visa Inc., EBay Inc.and Stripe Inc., abandoned the project. The defections underscored companies’ fears that the Libra currency won’t pass legal muster as regulators and public officials have lined up to criticize the effort.

The news comes days before the Libra Association, the group that will oversee the digital currency, prepares to gather its members and ask them to sign a charter agreement. The meeting is slated to take place on Monday in Geneva.

In a statement on Friday, EBay expressed its support for the project, but said it would focus on its own payments products. “We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member,” an EBay spokesman wrote in the emailed statement. “At this time, we are focused on rolling out eBay’s managed payments experience for our customers.

Payments giant Stripe, one of the most high-profile startups to sign onto the project, signaled it remained open to working on it in the future. “Stripe is supportive of projects that aim to make online commerce more accessible for people around the world. Libra has this potential,” said a company spokesperson. “We will follow its progress closely and remain open to working with the Libra Association at a later stage.”

Mastercard said in a statement that it will “remain focused on our strategy and our own significant efforts to enable financial inclusion around the world,” adding, “We believe there are potential benefits in such initiatives and will continue to monitor the Libra effort.” Visa said the company would also continue to evaluate whether to join in Libra in the future, and that the company’s “ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations.”

Facebook declined to comment.

The Libra association is composed of about two dozen members including Facebook payments companies, as well as a swath of tech companies that were still sign on as of Friday, including Uber Technologies Inc., telecom providers Iliad SA and Vodafone Group Plc, and cryptocurrency companies like Coinbase Inc.

To contact the reporters on this story:
Spencer Soper in Seattle at ssoper@bloomberg.net;
Julie Verhage in New York at jverhage2@bloomberg.net;
Jenny Surane in New York at jsurane4@bloomberg.net;
Lydia Beyoud in Arlington at lbeyoud2@bloomberg.net

To contact the editors responsible for this story:
Jillian Ward at jward56@bloomberg.net
Robin Ajello, Alistair Barr

© 2019 Bloomberg L.P. All rights reserved. Used with permission.

(Updates starting in the first paragraph.)

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