In a massive blow to the social media juggernaut, Paypal has become the first company to pull out of the alliance poised to launch Facebook’s new Cryptocurrency, Libra.
In a statement made on Friday, Paypal said it “[remained] supportive of Libra’s aspirations” but had decided to focus on it’s core business.
Paypal was one of the original members of the Libra Association, which comprised organisations like Visa, Mastercard, Ebay, Uber, Spotify, Vodafone and, of course, Facebook.
Libra responded to Paypal’s withdrawal saying it was aware that it’s attempts to “reconfigure the financial system” would be hard, and that ‘commitment to the mission’ was of the utmost importance. In its statement it said it was “better off knowing about this lack of commitment now.”
Issues with Libra
However, despite Libra’s lofty aspirations of ‘enabling a more inclusive global financial system’ it has come up already come up against a number of controversies.
Firstly, Libra is plagued by the shady cryptocurrency industry that has come before. The astonishing rise and fall of Bitcoin, the Ponzi scheme of OneCoin, and the suggestion that cryptocurrencies enable all manner of crime, all paint a dim picture of the industry as a whole.
And whilst Libra aims to mitigate the risks of crime and dramatic fluctuation, there are many sceptical about its ability to succeed.
In fact, in Europe, France and Germany have both voiced concerns over users’ privacy and have vowed to block use of the cryptocurrency within their jurisdictions. These concerns extend to the rest of Europe as a whole, and Libra have already accepted that they may be prevented from launching in Europe, at least until the underlying issues have been addressed. Already, Libra’s global ambitions have been stymied.
Not only this, but the global banks and world leaders are sceptical about the currency, with even US President Donald Trump tweeting that he is “not a fan” and UK treasury chief Mnuchin saying that it could be misused.