PayPal became the first member to officially depart from the association behind the Facebook-led Libra stablecoin project, as confirmed in a statement delivered to various press outlets earlier this week.
The digital payments giant said that it has “made the decision to forgo further participation, [in Libra]” whilst continuing to pledge its ideological support for the project with the anticipation of “continued dialogue on ways to work together in the future”.
PayPal was one of the founding 28 entities behind Libra, however suspicions were raised regarding the longevity of its membership last Thursday after it had failed to attend a key stakeholder meeting.
Though it has dropped out of Libra, PayPal still actively supports blockchain and cryptocurrency through partnerships with BitPay, Coinbase, and more. Coinbase customers in some countries can even withdraw or sell their crypto to their PayPal accounts.
“Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.”Official PayPal Statement
Reasons as to why PayPal has dropped out have not been revealed, however it can be speculated that it could be related to one of the folllowing reasons:
- Libra is under regulatory scrutiny.
- The risk to the project and the companies own image from Facebook’s strong public association with the project (due to its string of PR disasters and notoriety.)
- Fears that Libra could challenge the dollar standard may be partly alleviated by the exodus of a company with as much control over the online payments sector as PayPal. It still pales in the shadow of both Visa and Mastercard, but it’s a start.
Libra’s consortium of founding members, like Facebook, are largely also blue chip enterprises. None have shown signs of cold feet as of yet, but PayPal may not be the last member to leave from the original 28 (four of which from the blockchain sector).
Libra’s 28 Founding Members
PayPal, Payu, Stripe, Visa.
Technology and marketplace: Booking Holdings, eBay, Facebook Calibra, Farfetch, Lyft, Mercado Pago, Spotify, Uber.
Telecommunications: iliad, Vodafone.
Blockchain: Anchorage, BisonTrails, Coinbase, Xapo.
Venture capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures.
Non-profit and multilateral organizations, academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking.