Facebook’s Libra: Paypal non-committal in the face of regulatory rumblings

September 16, 2019 | Digital Assets

PayPal is a member of the Libra Association

PayPal just issued an important statement on the Libra digital currency.  And it’s very telling about the future of the cryptocurrency. The firm said its membership in the association is “a non-binding commitment.”

Central banks, financial regulators, and governments are coming out with increasingly negative noises around Libra. Fears swirl around money laundering, adequate regulation, international coordination, and risks to consumers.

PayPal’s comment is significant. Some other members of the Libra Association have thought about leaving the project.

The Libra Association

The Libra Association is a non-profit organization that oversees the Libra digital currency. Based in Geneva, its members include MasterCard, Visa, PayPal, Stripe, eBay, Uber, and Facebook subsidiary Calibra.

Libra is a ‘stable coin,’ backed by collateral of the world’s biggest currencies. Libra aims to bring cryptocurrencies home to the millions of unbanked people across the globe. It will also act as a foil to government-backed fiat money and enhance global financial inclusion.

PayPal is making light of its ties with the Libra by stressing that it only has a non-binding agreement. “Obviously, I think there is a lot of work to happen before we get to that point where it becomes something more than just a very exciting idea,” Paypal said.

Rising tension

There have been rumblings earlier within the Association, with at least three unnamed members said to be considering backing out.

According to an FT report, these members were uncomfortable because of worldwide regulators’ concern with Libra.

However, pioneering member Facebook too is unhappy because other members are not adequately supporting the project in public.

“Facebook is tired of being the only people putting their neck out,” said one of the members.

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