As Libra- Facebook’s Cryptocurrency has been attacked by the regulators and keeping this in mind, the digital payment firm “PayPal” on 4th October 2019 back stepped from the Group.
The California-based company “PayPal has decided to forgo further participation in the Libra Association at this time”.
“We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future.”
International markets are against the Libra that is from central banks to Governments. They are questioning Facebook over how they will regulate the cryptocurrency.
Association head of policy Dante Disparte said: “It requires a certain boldness and fortitude to take on an endeavor as ambitious as Libra — a generational opportunity to get things right and improve financial inclusion”.
“The journey will be long and challenging. We’re better off knowing about this lack of commitment now, rather than later.”
Facebook disclosed about Libra in June 2019 and is said to be launched in 2020. It will be rolled out to prevent the wild swings of Bitcoin and other virtual entities.
The Libra Association, a non-profit organization based in Geneva, is monitoring the blockchain-based coin.
Facebook sees Libra as a new global cryptocurrency that ensures to offer stable virtual money that will be smartphone-based and will bring more than a billion “unbanked” people into the financial system.
“The type of change that will reconfigure the financial system to be tilted towards people, not the institutions serving them, will be hard,” Disparte said.
“Commitment to that mission is more important to us than anything else.”
The other members of Facebook’s cryptocurrency- Libra Group such as Mastercard, Visa, and other financial partners are giving a second thought about continuing. This is happening because of the regulator’s unleashed ire on the project. They are also digging for more information from the members of the association.
Lyft and Uber- the ride-hailing apps are other members in Libra basket.
The head of the association said last month that project leaders were aiming to “reassure” regulators concerned about virtual money.
Mark Zuckerberg has a meeting with his employees in July and in the leaked comments he said that he is optimistic about Libra ever after getting harsh comments from public officials in several countries.
“The public things, I think, tend to be a little more dramatic,” he said.
“But a bigger part of it is private engagement with regulators around the world, and those, I think, often, are more substantive and less dramatic… That’s where a lot of the discussions and details get hashed out on things.”
What is Cook’s views about this matter?
Apple chief executive Tim Cook in an interview said that he does not like the idea that the company takes over the roles reserved for governments.
Cook did not specifically name Facebook but brought up the matter about issuing currency, like national defense, which is mostly left up to the states.
Facebook and around two dozen partners disclosed the prototype of Libra which is an open-source code for developers who are interested in weaving it into apps, services or businesses.
A researcher at the Peterson Institute for International Economics-Martin Chorzempa, questioned whether Libra will succeed in fulfilling its vision.
In particular, Libra must comply with regulations requiring the collection of personal information about its customers in order to expose crimes such as money laundering or fraud.
Chorzempa said, “It is not clear to me that Libra is anywhere near being able to perform those know-your-customer requirements that would allow them to legally serve these communities”.
“Libra would have to work with governments to make sure they are compliant or get those rules changed, and that is a difficult process.”