Facebook’s cryptocurrency project now faces a severe setback as more than five founding members including eBay and PayPal back out from the project even before its inaugural meeting.
The companies that withdrew their support include PayPal, eBay, payments provider Stripe, Visa and Mastercard. A non-profit (started by the social media/IT services giant Facebook) which was overseeing the project also walked out of the association.
These departures from major payments companies land a serious blow to the project because their technology and expertise were very much needed for Libra’s success. Many analysts believe that without support from these companies the project is likely to fail.
The Libra project has faced criticism since its inception from the government and regulatory bodies. Recently, Facebook’s blockchain head David Marcus was asked to testify in front of the congress about the project. Regulators around the world also have expressed their dissatisfaction with the project and have complained about the need for a much detailed explanation on the working of Libra.
“Although the makeup of the association members may grow and change over time, the design principle of Libra's governance and technology, along with the open nature of this project ensures the Libra payment network will remain resilient,” stated Dante Disparte, the Libra Association's head of policy and communication in response to the walkout.
Several prominent members including PayU, Lyft, Spotify, and Uber still stay on in the project.