CEO and President of Mastercard ‘Ajay Banga’ recently participated in an interview with the Financial Times, in which he elaborated on the company’s decision to leave the Facebook-led Libra project. Banga also currently resides on the Mastercard ‘board of directors’.
He additionally holds a various positions at other companies such as ‘The Cyber Readiness Institute’ (co-founder), ‘International Chamber of Commerce’ (the first vice-chairman), ‘United States Council for International Business’ (trustee), ‘U.S.-India Strategic Partnership Forum’ (founding trustee), ‘U.S.-India CEO Forum’ (member), ‘American India Foundation’ (Chairman Emeritus), and ‘Partnership for New York City’ (co-chair).
According to Banga – Mastercard left the project due to concerns over Libra’s viability / suitability for regulatory compliance – in addition to general doubts regarding the business-model upon which Libra is built.
Mastercard has been forging ahead since withdrawing support for the Libra Association; with new partnerships established with the likes of Cardlay.
“It went from this altruistic idea into their own wallet. I’m like: ‘this doesn’t sound right… If you get paid in Libra [coin] . . . which go into Calibras, which go back into pounds to buy rice, I don’t understand how that works”Ajay Banga, who has been the CEO and president of Mastercard
Libra Association is comprised of a number of corporate entities. Last year, however, a significant proportion of its founding members chose to withdraw support for the project, with only 20 of the original 28 remaining (at the time of writing).
Mastercard’s departure was accompanied by that of other finance / payments processing companies such as Visa, Stripe and PayPal. Founding members to leave in 2019 included: eBay, Uber, Lyft, and Spotify – and Vodafone became the latest to leave (in late January 2020).
These departures coincided with a reputational degradation of parent-company Facebook, supported by government entities and mass media campaigns. Last year Facebook and it’s co-founder / leader Mark Zuckerberg received intense scrutiny from courts worldwide, including the USA.
Libra is a blockchain platform, with a eponymous token that is self-described as “stable global cryptocurrency built on a secure network”.
According to its official website, the vision of Libra is to provide a cryptocurrency which can offer users ‘stable value’ due to being backed by a diverse reserve of assets. Other goals include maintaining an independent governance model via the Libra Association.
Considering the regulatory pressure and scrutiny honing in on the Libra project, it could be assumed that existing governments banking entities see this multi-currency backed token as a threat.
This may be the same reason that it appears that many other former members do not wish to risk tarnishing their reputation, by associating with a project which is not only under high regulatory scrutiny but is intrinsically associated with facebook: which has its own strong stigmas.