PayPal confirm they are leaving the Libra Association

PayPal confirm they are leaving the Libra Association

The digital payments company said on Friday that it is withdrawing from the Libra Association and would focus on its existing businesses.

Prior to this announcement, a report from the Financial Times indicated that PayPal was trying to distance itself from Libra for a couple of reasons - including the heavy scrutiny the cryptocurrency was facing by regulators and Facebook not putting enough attention/care towards said criticism. The revelation comes just shortly after PayPal pulled out its support for the Facebook-allied stablecoin. Its other members include payments company Visa, ride-hailing app Uber and humanitarian charity Mercy Corps.

The Libra Assn., a group of companies Facebook has assembled to oversee the cryptocurrency, has 28 founding members.

On Twitter, the Libra Association wrote that its plans are "not an easy path"'.

"No. I really think that a currency should stay in the hands of countries". Facebook is also building a digital wallet, called Calibra, to store the currency.

Rep. Maxine Waters, the chairwoman of the House Financial Services Committee, has demanded Facebook founder Mark Zuckerberg testify in front of her committee before Libra is rolled out.

What this means: For Paypal to walk away from Libra right now even before the project has been launched is a big blow to Facebook and the Libra Association in general.

Global outcry is mounting over Libra - with central banks and governments railing against Facebook's upstart cryptocurrency and questions over how it would be regulated. Along with privacy concerns, Waters' has cited the potential for Libra to be used in money laundering and other financial crimes. In response, Facebook reportedly has hired several prominent Washington lobbyists.

While PayPal's statement did not clearly state reasons why it made a decision to withdraw its membership, the Financial Times reports that the financial powerhouse had indeed begun distancing itself from the project probably due to regulatory scrutiny that has been on the increase since the project was first announced.

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