PayPal pulled out of the entity overseeing Facebook’s new crypto currency initiative. PayPal was reportedly spooked by backlash from regulators in and outside of the US.
Facebook had announced the Libra Association in June, an independent, non-for-profit entity created to govern the Libra “virtual currency” built on blockchain technology.
As we reported in June, PayPal CEO Dan Schulman had said that while it was very early days for Libra, “we hope to enable developers and businesses to build inclusive and affordable financial service products for people across the economic spectrum.”
Facebook and other members played up philanthropic benefits of the Libra crypto currency, despite the fact it was to be controlled by an association of mostly Western corporations and venture capitalists.
According to Coindesk, “The project was met with immediate regulatory backlash, with policymakers in multiple countries claiming that Facebook might run the risk of destabilizing the global monetary order.”
PayPal probably learned a lot through its participation in the Libra Association, and it recently scored a victory of a different sort by gaining a payments license in China by acquiring a 70% stake in Chinese company Gopay – making it the first company outside China to be able to operate domestically in that country.