The coalition Facebook assembled to create a global payments network may be losing some key financial support. Visa, Mastercard and other financial partners who signed on to support Libra are reconsidering their involvement in the network, The Wall Street Journal reported Tuesday.
The financial partners are reluctant to attract regulatory scrutiny following backlash from governments and banks and have declined Facebook’s requests to publicly support the project, the Journal reported, citing sources familiar with the matter.
The Libra Association, which is the monetary authority controlling Libra that was co-founded by Facebook, says the cryptocurrency’s purpose is to “empower billions of people” who don’t have access to bank accounts and could use the digital currency for various transactions. Facebook is working alongside 27 launch partners for the digital coin, including PayPal, Visa, Uber, Coinbase, Lyft, Mastercard, Vodafone, eBay and Spotify, but aims to have 100 members in the Libra Association by 2020.
But since Libra was announced in June, government officials and regulators from across the globe have expressed reservations. Concerns over Libra stem, in part, from the social media company’s mixed record on handling privacy issues. There are also worries about potential volatility, money laundering and consumer protections.
Rep. Maxine Waters, chair of the US House Financial Services Committee, said Facebook “has repeatedly shown a disregard for the protection and careful use of this data.” The India government, which manages the third-largest economy in Asia, is reportedly considering banning trading of the currency.
In July, more than 30 groups, including the Economic Policy Institute and US PIRG, also asked Congress and regulators to impose a moratorium on Libra until “profound questions” are answered.
Visa declined to comment. Representatives from Facebook and Mastercard didn’t immediately respond to requests for comment.