As U.S. legislators and regulators continue to scrutinize Facebook’s planned launch of its Libra cryptocurrency, six (6) other financial backers of the project have announced withdrawal of their support.
Wary of becoming involved in a financial project that has yet to present proof that it is capable of meeting and complying with regulatory requirements, major credit card companies Visa and Mastercard, decided not to pursue plans of becoming founding members of the Libra Association.
Other companies that withdrew pledge of financial support and membership from the Libra Association, include eBay, Stripe, Booking Holdings and Mercado Pago. This recent development came after PayPal formally announced the company’s withdrawal a week ago.
As a result, the Libra cryptocurrency will only have Netherlands-based PayU on board as payments processor. However, it is purported the PayU is not accessible in the U.S. and Canada, as well as in some areas in the Middle East and Africa.
Treasury Secretary Steven Mnuchin says that it is necessary for the Libra cryptocurrency to meet financial regulatory standards, which up to now is not up to par.
Moreover, Secretary Mnuchin warned that if Facebook’s Libra launches while not meeting the anti-money laundering standards and the standards set by the Financial Crimes Enforcement Network, the Treasury Department would take enforcement actions against Facebook and its proposed governing body, the Libra Association.
Remaining Libra Associates Still Optimistic about the Libra Cryptocurrency Project
Despite the mounting pressure to comply with financial regulatory requirements, and the rising number of partners withdrawing as Libra Associates, the remaining partners held an inaugural meeting in Geneva, Switzerland yesterday (October 14, 2019).
Reuters reported that the remaining 21 members, out of the original 28 previously named as Libra Associates, reaffirmed their support for the cryptocurrency undertaking. The group formed and voted on the 5-member board, whilst agreeing to an interim articles of association, developed in accordance with Swiss Laws.
Making up the 5-member board are Facebook Executive David Marcus, and representatives of PayU, Andreessen Horowitz, Xapo Holdings Limited and non-profit organization Kiva Microfunds.
