Major defections could doom Facebook’s global stablecoin

The Libra cryptocurrency project has lost another major partner on Monday over regulatory scrutiny around the stablecoin.

Today, Booking Holdings – the company behind Priceline, Kayak, and Booking.com – dropped out of the Libra Association.

This is the latest in a string of high-profile departures. The Facebook-backed Libra cryptocurrency project recently lost Mastercard, Visa, Paypal, eBay-backed fintech startup Stripe, and many others.

Firms are pulling out due to warnings from politicians and government regulators. Even the G7 has drafted a report citing the concerns of central banks. The report said: “The G7 believe that no stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed.”

Libra Cryptocurrency Project Faces New Pressures

Earlier this month, Federal Reserve Chairman Jerome Powell expressed concerns about the Libra cryptocurrency project. Those concerns echoed in the G7 report drafted by members of the International Monetary Fund. Concerns about money laundering and other financial crimes rattled politicians, who quickly drafted letters to executives at financial institutions like Visa and Mastercard.

In addition, U.S. senators raised concerns about other social issues like sexual abuse in Facebook’s Messenger app. The social media company continues to face criticism for other issues around privacy, disinformation, and interference in elections.

Coinbase Strikes Back on Stablecoin

As we have discussed on multiple occasions, China will likely soon announce the creation of its own stablecoin. The nation has accelerated the development of China Coin in reaction to the development of Libra. Meanwhile, U.S. regulators have effectively stalled the Libra cryptocurrency project. Coinbase CEO Brian Armstrong has criticized U.S. officials and their stance around Libra. He recently questioned whether these regulators will reconsider their views given China’s pending stablecoin.

“Now that China is looking into creating a stablecoin, I wonder if the U.S. will reconsider its ridiculous response to Libra, Armstrong recently tweeted. “There are many cryptocurrencies, and Libra is just one of them. But the way the U.S. government reacted, it’s like they almost want to be left behind.”