Facebook cryptocurrency: PayPal withdraws from Libra project

UNITED STATES, WASHINGTON (OBSERVATORY) — PayPal has finally decided not to take part in Facebook’s digital currency project, Libra, which is scheduled for launch in 2020.

This is a new setback for the Libra project: PayPal leaves the ship after weeks of skepticism, even hostility, from various governments, experts and competitors.

The payment services company said in an email that it had “made the decision to withdraw from the Libra association”, a consortium of partners like Visa and Mastercard, based in Geneva, to whom Facebook entrusted the governance and management of his digital money project.

PayPal, which had to invest at least $ 10 million in the project, as each member of the association, did not justify this decision. “We continue to focus on our mission and strategic priorities, to democratize access to financial services for underserved populations,” the group said.

A source close to the company told the Financial Times that it “seems that there has been little preparatory work done with financial regulators” and that payment services such as Paypal did not want ” see regulators’ attention spilling over their business.”

Libra is expected to offer starting in the course of 2020 a new payment method outside the traditional banking channels, to buy goods or send money as easily as an instant message. A project that is receiving much criticism from regulators and governments around the world.

They are particularly worried about Facebook’s bad reputation for privacy and protection of personal data. In July, the US Finance Minister, Steven Mnuchin, issued a warning to Facebook, the government fearing that such virtual currency is used to launder money or deceive the taxman.

The size of Facebook, the world’s largest social network with 2.7 billion users, also means that the new currency could disrupt the global financial system and make it more difficult for central banks.

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