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MasterCard, Visa and others abandon Facebook's Crypto Libra

MasterCard, Visa and Others Put A Hold on Libra

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Last week was tough for Facebook. While Facebook’s CEO just underwent another moment of public embarrassment with a leaked memo on The Verge, key partners of LIbra, its future cryptocurrency have just revealed they would “reconsider” their involvement.

Libra, the future cryptocurrency unveiled by Facebook – whom launched was postponed to later this year – might not become a reality.

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According to a report published in the Wall Street Journal, Visa, Mastercard and other financial institutions who initially said they would partner with Libra communicated to Facebook that they might have to “reconsider” their involvement.

Not only  this questions the future of Libra, but also highlights the slumping credibility of Facebook since Cambridge Analytica and its inability to make a solid come back. 

Visa and Mastercard on hold

This fall was supposed to be the big break for Facebook – Libra’s launch, the first cryptocurrency generated by a social media, seemed exciting and was about to happen.

But a few days before the public announcement, a leaked memo was published on the Verge, putting Zuckerberg in a non-flattering light towards 2020 presidential elections and his point of view on many business topics.

As financial experts were first content about Libra’s ability to be way less volatile than Bitcoin, the main financial initial backers – from Visa, to Paypal and Mastercard – are said to have put a hold on the partnership as they “did not want to attract regulatory scrutiny”, according to MSNBC.

As a result, they declined to publicly support Libra’s launch campaign, reported the Wall Street Journal.

European countries ban Libra

Not only the main financial sponsors have stalled Libra, but several countries in Europe have confirmed they would not allow Libra, such as France and Germany.

Moreover, these two countries have urged Brussels to organize meetings at the European Parliament to block Libra across the Old Continent.

As the cryptocurrency is set to launch in June 2020, it is starting to attract an overall skepticism both from politicians and financial experts.

Read on Alvexo: “Long-Awaited Facebook Libra Cryptocurrency Unveiled”

Paypal is officially out

Most importantly, Paypal has published a statement on The Verge to explain why it was permanently leaving Libra’s project.

“We have decided 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.”, said the statement.

As 28 companies gathered an association last June to think about Libra’s launch, it seems that key partners are losing interest – which could be the worst kind of publicity Facebook would need a few months prior to Libra’s set launch.

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Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.