PayPal has decided to withdraw from the Libra Association, a non-profit organization shipped by 28 companies and formed June of 2019 to oversee the emergence of the upcoming cryptocurrency but also to make it available to consumers.
The company did not provide any specific reason for its withdrawal from the Libra project. But in a statement published by TheVerge, it says:
We continue to support the Libra Association and look forward to ongoing dialogue on new ways of working together in the future. Facebook is a long-term and valued strategic partner of PayPal and we will continue to partner and support the company.
However, an article that posted yesterday the Financial Times reported that PayPal was moving away from the project due to increased regulatory controls. The company said it would not attend a meeting in Washington, and the FT says that at least one primary concern of PayPal was the lack of attention that Facebook executives appear to be showing in the major reactions to Libra. Another unanswered question by Paypal seems to be how the platform will be able to combat money laundering.
In a statement posted by TheVerge, Dante Disparte, head of policy and communications at Libra Association, reaffirmed the nonprofit's commitment to "create a comprehensive payment network" by criticizing PayPal for not having the "strength" to do so. insists on something as difficult and demanding as the Libra project.
"It takes courage and vigor to make an effort as ambitious as the Libra project," says Disparte.
The journey will be long and difficult. The type of change that will reshape the financial system should be focused on the people and not on the institutions that serve them and this will be difficult. Commitment to this mission is more important to us than anything else. So it is better to know now who is not engaged.
The loss of PayPal does not necessarily mean the dissolution of Libra, but no matter how we do it, the company was an important economic factor, along with existing member companies such as Mastercard and Visa, of the Libra Association.
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The loss of PayPal may not be a worrying sign of project progress, but the Wall Street Journal Reported also earlier this week that both Mastercard and Visa, as well as Stripe's digital payment platform, were considering withdrawing from the Libra Association with similar concerns about money laundering from illegal activities.