PayPal scraps Facebook's Libra crypto group, others may follow
Fed's Jerome Powell: Facebook's Libra has a burden of proof to carry
Federal Reserve Chairman Jerome Powell on Facebook's plans for the Libra cryptocurrency.
PayPal Holdings is withdrawing from the Libra Association, the Facebook-backed cryptocurrency organization, as other partners' support is reportedly wavering.
The online payment processor said in a statement that it would no longer participate with the group and would instead focus on its core business.
"We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future," PayPal said in the statement to FOX Business.
The Geneva-based Libra Association plans to oversee a future cryptocurrency called Libra and a crypto platform called Calibra.
Facebook announced the association’s plans in June, saying it had partnered with companies like Mastercard, Uber and PayPal.
However, Visa, Mastercard and other key financial partners that have agreed to help build and maintain Facebook’s Libra payments network are having second thoughts about being involved with the social media company's proposed digital currency.
This follows backlash from U.S. and European government officials, people familiar with the matter told the Wall Street Journal. These sources also said that some of Libra’s backers are fearful of attracting regulatory scrutiny and have declined Facebook’s pleas to voice their support of the project in public.
"Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities," PayPal said in its statement.
Facebook CEO Mark Zuckerberg's face is visible on a mock "Zuck Buck" depicted on a screen as David Marcus, CEO of Facebook's Calibra digital wallet service, foreground, is questioned by Rep. Brad Sherman, D-Calif., during a House Financial Services C (AP)
On Twitter, the Libra Association wrote that its plans are "not an easy path."’
"We recognize that change is hard, and that each organization that started this journey will have to make its own assessment of risks and rewards of being committed to seeing through the change that Libra promises," the group tweeted.
The first Libra Council meeting is scheduled for later this month. The group said 1,500 entities "have indicated enthusiastic interest to participate."