Visa, Mastercard and eBay Announce Libra Project Exit

Oct 15, 2019

Last Friday ended with a bitter taste for Facebook. In one stroke Visa, Stripe, Mastercard and Mercado Pago payment processors, in addition to the eBay marketplace platform, announced their departure from the Libra project launched in June by the social network with the proposal to create a digital currency and a global payment system. payments.

In separate statements, Visa and Stripe have said they hope for the future of the Libra Association, but prefer to wait for the project to be better structured before taking on a more serious role within the initiative.

Remember that, early last week, PayPal's digital payment portfolio was the first company to leave the coalition, also maintaining the discourse that it wishes luck for the venture and is open to working on the project again in the future.

In his Twitter profile, David Marcus, Facebook executive responsible for conducting the Libra project, thanks Visa and Mastercard for their support "until the last moment" and says he respects the brands' decision because of the pressure they must be under. But he stresses that a change of this magnitude is difficult and that the public must "Watch for news soon."

A matter of time
Although a mass withdrawal is never good news, in this case there is a context that explains the departure of the marks: this Monday (14th) all founding members of the Libra Association need to be in Geneva for the first board of the initiative. At this time, the assignments of all partners will be defined and a more formal contract will finally be signed.

While such a deal proves beneficial to partners for companies such as Uber and Spotify, and venture capital companies (which are still members of the association), this level of commitment could seriously compromise the business of payment brands, which operate within an extremely regulated market.

It turns out that cryptocurrency, like all existing ones, will be built within a blockchain network and operating (at least initially) similar to currencies like Bitcoin and Etherum, which are still very unstable and created in a very tightly regulated environment.

Probably with this background in mind, payment companies have been called in by members of the US government to explain how they will ensure that Libra is a safe environment for users and protected from hacking intrusions.

Because they are still in the early stages of the project - which has everything to be long and rather tangled - the brands opted to exit the Libra project while no official agreement had been signed, hoping for a better structuring of the project to consider a possible return.



Contact Us

  • Nieuwe Kerkstraat 13 1018 DW, Amsterdam, Netherlands