Facebook announced the launch of its Libra crypto-currency earlier this year. It also assembled a group of companies that would regulate it.
PayPal is the first company to drop out of the Libra Association which comprises almost 30 big name companies.
In a press statement, the company said it was forgoing its participation in the Libra Association in order to, “continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for under-served populations.”
The statement continues, “We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future. Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.”
Libra stirred up controversy since its launch, thanks in part to its connection to Facebook, a company with a less than stellar past dealing with user privacy rights.
The Financial Times reported that Paypal begun distancing itself from Libra owing to increasing regulatory scrutiny, and concerns about how the association would work around the money laundering threat.
Related article: US lawmakers Ask Facebook to Halt the Launch of its Libra Cryptocurrency
Libra Association’s head of policy and communications, Dante Disparte, expressed his disappointment in the move by PayPal. He said in a statement, “It requires a certain boldness and fortitude to take on an endeavor as ambitious as Libra — a generational opportunity to get things right and improve financial inclusion.”
He adds, “The journey will be long and challenging. The type of change that will reconfigure the financial system to be tilted towards people, not the institutions serving them, will be hard. Commitment to that mission is more important to us than anything else. We’re better off knowing about this lack of commitment now, rather than later.”
The statement by Disparte thinly veils his implication that the company does not have the gall to pursue such a daunting project.
Earlier on MasterCard and Visa also expressed concern about the possibility that Libra could be used for money laundering. The two companies, as well as digital payment platform and processor Stripe, also considered backing out of the association.
