PayPal announced that it has left the Libra Association. It has also been reported that other major companies in the association are considering leaving the association. Speculation about PayPal leaving the Libra Association began after PayPal missed an important meeting for the association.
However, the company plans to work with Facebook in the future when the need arises. Instead, the company will continue focusing on advancing its core business as it strives to democratize access to finance for populations that are underserved by the financial sector.
This is a Huge Blow
Losing a major partner such as PayPal is going to hurt the Libra Association. It might cause other firms that were getting cold feet to jump ship. For one, it makes it less lucrative to be part of the project. However, PayPal did say they might be willing to joining the project later.
One of the most likely causes for PayPal leaving the association is regulatory pressure. Lawmakers started investigations into the project immediately after it was announced. The criticism about the project has come from both sides of the aisle. Even President Donald Trump has weighed in on the issue. Another person that has been critical if the project is the chief of the Federal Reserve Jerome Powell.
Facebook has been on the charm offensive in the US and Europe. The company wants to woo lawmakers to its side by convincing them that the project is not a threat to traditional finance. During a hearing in September, the head of the Calibra wallet said that the project was willing to work regulators to ensure they were satisfied before the project was launched.