Visa Inc and Mastercard Inc on Friday announced their departure from Facebook Inc’s Libra project, the social network’s plan for a worldwide digital currency.
Along with the two payment giants, several other large companies have said that they are exiting Libra. Payment processing company Stripe Inc is stepping back, as well as e-commerce company eBay Inc.
PayPal Holdings Inc was the first of Libra’s big partners to leave, announcing on Oct. 4 that it would no longer be involved.
Facebook has faced substantial criticism since the summer when it unveiled plans to create a separate, private currency system to allow people to make cross-border payments more easily. The Libra Association, based in Switzerland, was supposed to give the currency project distance from Facebook, which would not own Libra.
Despite those efforts, financial regulators, as well as members of the US Congress, said that the privacy issues raised with the social networking company controlling a currency, while also expressing concern about how Libra could be used for money laundering like bitcoin or ether, other digital currencies.
US President Donald Trump tweeted that Facebook should be subject to US banking laws if the Libra project were to move forward.
All five departures come less than a week before the Libra Association’s official signing ceremony in Switzerland.
The impact of Libra’s loss of Visa and Mastercard cannot be understated. The two hold an effective duopoly over credit and debit cards in the US and Europe, and are making substantial inroads into payment systems in developing countries. Their initial agreement to join the Libra Association instantly gave Facebook’s project legitimacy. It also gave Facebook access to Visa and Mastercard’s networks, which could have given a pathway for users to convert traditional currency into Libra.
“If there was any ambition to scale Libra very quickly and make it widely accepted, they would have been able to do that through Visa, Mastercard and PayPal,” said Sanjay Sakhrani, a payments industry analyst at investment bank Keefe, Bruyette & Woods. “Now it’s going to be a bigger challenge.”
Visa said that it would re-examine a potential membership in the Libra Association if and when Facebook is able “to fully satisfy all requisite regulatory expectations” in its development of Libra — a sign that the regulatory and political hurdles Libra is facing were becoming too much to bear.
“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,” Visa said.
Gartner Inc analyst Avivah Litan said that while the defections are “a big setback” for Facebook and Libra, they would not kill the project.
“It’s not the end of the effort, it just becomes much more contentious,” Litan said.
With the recent departures, Libra’s membership now consists mostly of venture capital firms and nonprofits. Uber Technologies Inc, Spotify Technology SA and Lyft Inc were still listed as members on Friday.
None of them responded to requests for comment.
Vodafone Group PLC, a telecommunications company based in Europe, which has a substantial presence in Africa and has specialization in mobile payments, was also still listed as a member.
Facebook chief executive officer Mark Zuckerberg is to appear in front of the US House Financial Services Committee this month to discuss Libra. That committee is chaired by US Representative Maxine Waters, who has been a critic of Libra from its onset.
The company has hired several Washington lobbyists to convince politicians and regulators to approve the project.
In a series of tweets, Libra co-creator David Marcus was not backing down either, despite Visa and Mastercard’s departure.
“The pressure had been intense (understatement), and I respect their decision to wait until there is regulatory clarity for Libra,” Marcus said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last