Every Major U.S. Payment Processor Has Exited Facebook’s Libra Project
Russell Brandom, the Verge:
When Libra launched on June 18th, it seemed like an alarming new front in Facebook’s megalomaniacal expansion. Having captured billions of users and tens of billions of dollars in annual profits, the company would now be taking over currency itself. The company’s head of blockchain, David Marcus, laid out his plan for Libra in a detailed white paper, with some of the financial world’s most powerful companies already signed on to help govern the new currency as part of the Libra Association. It was Facebook’s vision for an international currency, and based on the company’s partners, it seemed unstoppable.
That was then. The first to ditch Libra was Paypal, which withdrew on October 4th. Then, over the course of a few hours on October 11th, Visa, Mastercard, Stripe and Mercado Pago all bailed on the project, with eBay tagging along for good measure. That meant every major US payment processor has exited the association. (The final remaining payment processor, PayU, has not responded to multiple requests for comment.) It’s an alarming turnaround for the Facebook-backed project, and the first clear indication that Libra’s founders may have bitten off more than they can chew.
Losing five companies in the span of a couple hours might seem like a panicked rush for the door, but the timing matters. On October 14th, all the founding members are set to convene in Geneva for the first ever Libra Council meeting. That’s where they will hammer out the different roles to be played by the different parties and try to answer all the governance questions that aren’t spelled out in the initial white paper. Ultimately, that will result in a formal charter, with each member signing their name to the new agreement.