After the PayPal payment service was the first to leave the Libra cryptocurrency project , many talked about the possibility of a “domino effect”. This is exactly what happened: Visa, MasterCard and eBay left the project.
Libra Association breaks up
In addition to these three giants, two more companies refused to participate in the Libra Association: the Latin American payment system Mercado Pago and the American developer of e-commerce solutions Stripe. Thus, together with PayPal, the Libra Association lost six significant members.
The reasons for the departure of these companies will not have to go far. All of them did not expect that the initiative would meet such resistance from regulators around the world. Apparently, these giants hoped that the scale of the project would allow it to start smoothly and without a hesitation, but now participating in the Libra Association literally puts companies at risk: the US authorities do not like it when someone acts against their will, therefore it’s completely can attack the core businesses of participants.
However, not everything is so tragic for Libra. Almost every company in its statements made it clear that it was ready to return to the project at later stages. It turns out that Zuckerberg will have to solve all the issues with the regulators alone, create cryptocurrency at his own expense, and the rest will catch up only if he succeeds.
Question: if Libra is launched successfully, why does it need other companies? Facebook sits on a huge pillow of money, which is more than enough for the development of the project.
Can Facebook release cryptocurrency without partners
The need for other companies is more due to two points – their user base and technical developments. Visa and MasterCard serve billions of people, and eBay misses hundreds of millions of customers. All these people could gain access to cryptocurrency, but now this will not happen. At least in the near future.
Along with a wave of resignations, a number of companies have expressed their firm intention to remain in the project. These include Uber, Lyft and the Anchorage cryptocurrency storage service. This is not to say that it smooths the negative around Libra: the first two companies cannot yet be called a sustainable business, and the scale of Anchorage does not reach all of the above participants.
As a result, out of 28 members of the Libra Association, 22 remain. Hoping that none of them will follow the example of Visa and MasterCard was at least too optimistic. If you look at the situation soberly, only progress on the issue of regulation can save us from a new wave of withdrawals, but it has not yet been outlined. On October 23, Zuckerberg will personally address the US Congress on this issue, so we will wait for the outcome of this event.
Publication date 10/13/2019
Share this material on social networks and leave your opinion in the comments below.
