Mastercard, Visa, eBay Drop Out of Facebook's Libra Payments Network -- Update
11 Octubre 2019 - 4:36PM
Noticias Dow Jones
By AnnaMaria Andriotis and Peter Rudegeair
The biggest financial companies that Facebook Inc. recruited to
launch a cryptocurrency-based payments network have backed out of
the project, threatening to derail an ambitious initiative to
remake global finance before it ever gets off the ground.
Visa Inc., Mastercard Inc., Stripe Inc. and eBay Inc. said
Friday they were withdrawing from the group of companies that had
originally signed on to help launch the libra cryptocurrency,
following PayPal Holdings Inc., which dropped out of the Libra
Association last week.
The loss of four of the largest payments companies in the world
leaves Facebook without the muscle it assembled to launch libra, a
digital currency it hoped would make it a player in e-commerce and
global money transfers. The project now mostly hinges on smaller
payments companies, telecommunications providers, venture-capital
firms, e-commerce merchants and nonprofits.
Facebook and the Libra Association didn't immediately respond to
requests for comment.
Some of the companies left open the possibility of rejoining the
network in the future.
"Our ultimate decision will be determined by a number of
factors, including the Association's ability to fully satisfy all
requisite regulatory expectations," a Visa spokesperson said in an
email. "Visa's continued interest in Libra stems from our belief
that well-regulated blockchain-based networks could extend the
value of secure digital payments to a greater number of people and
places, particularly in emerging and developing markets."
When Facebook unveiled libra this summer, it announced that 27
other companies and organizations had agreed to back it. The idea
was that merchants including eBay, Uber Technologies Inc. and
Spotify Technologies SA would accept libra as a form of payment,
and that companies like Mastercard, PayPal and Stripe and would
enable consumers and merchants to convert their national currencies
into and out of libra.
Those partners were invited to attend an Oct, 14 meeting in
Switzerland to formally sign on to the project, The Wall Street
Journal previously reported.
The loss of Visa and Mastercard is a significant setback for
libra. The credit and debit cards that run over their networks
could have been an easy way for consumers to buy libra coins to use
them for purchases. If those payment methods are no longer
supported, that limits the options available to turn their funds
into cryptocurrency.
Lawmakers and regulators were alarmed when libra was announced,
criticizing Facebook for not providing sufficient details about how
its backers would ensure it couldn't be used to launder money and
channel funds to terrorists. More recently, government officials
have pressed other companies in the Libra Association for answers
to those questions.
This summer, the U.S. Treasury Department sent letters to
Mastercard, PayPal, Stripe and Visa asking for a complete overview
of their compliance programs and how libra would fit into them, the
Journal reported. Earlier this week, two U.S. senators wrote to the
CEOs of three of those companies to voice their concerns about
libra.
"If you take this on, you can expect a high level of scrutiny
from regulators not only on Libra-related payment activities, but
on all payment activities," the senators wrote.
Facebook Chief Executive Mark Zuckerberg agreed to appear before
Congress later this month to answer lawmakers' questions about how
libra would comply with financial regulations.
--Liz Hoffman contributed to this article.
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com and
Peter Rudegeair at Peter.Rudegeair@wsj.com
(END) Dow Jones Newswires
October 11, 2019 17:21 ET (21:21 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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