Support for Zuckerberg's Libra is dwindling
Priya Wadhwa
10x Industry

Support for Zuckerberg's Libra is dwindling

Who'll be the next after PayPal to disown Facebook's Libra?

In the latest addition to Zuckerberg’s issues is Paypal’s withdrawal from its Libra Association, the non-profit that is made up of 28 firms.

“PayPal has made the decision to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations,” PayPal said in a statement.

Moreover, Visa, Mastercard and other financial institutions has also been reported to be reconsidering their involvement in Facebook’s Libra Project, that was launched to democratise money through the cryptocurrency.

At the time of its launch, the Libra Project received much criticism, especially from regulators, lawmakers, congressional finance committee members, as well as prominent industry leaders.

Following this, in September France said it would block the development of Facebook’s Libra in Europe, which came as a major blow to the project.

“I want to be absolutely clear: in these conditions, we cannot authorise the development of Libra on European soil.”
Bruno Le Maire, France’s finance minister

The concern shared by regulators and governments is that people could potentially abandon fiat money or the official currencies of countries, which could put the country is a financial crises.

Facebook’s investors have also not been very happy with Zuckerberg’s strong arming ways. Zuckerberg is at the helm of one of the most powerful companies in the world that has the power to change opinions, perceptions and thinking. Its role in the election of Donald Trump is a strong example of its power, yet ability to evade with mere fines.

The record-setting $5 billion fine from the Federal Trade Commission actually saw Facebook’s share price increase. While the amount is big, it essentially tells entrepreneurs that they can evade the law simply with fines. For reference, Facebook’s net income for 2018 totalled just over $22 billion.

Furthermore, with regulatory pressure and investigations piling up, PayPal’s move could also be a sign of companies not wanting to be associated with Facebook so as to not bring legal hassles. It could also be a sign of Zuckerberg pushing his way through to making Libra’s decisions.

While the Libra association is made up of 27 members now, down from 28, its non-profit nature as well as potential to disrupt the financial industry — the primary markets of these 27 backers — as well as the currency of countries, could see hesitations mounting.