One of the founding members of Facebook's Libra cryptocurrency project has reportedly now called it quits. Digital payments giant Paypal announced this week that it will be leaving the Libra association, making it the first company to drop out of the project as it faces growing global regulatory scrutiny.
Facebook's Libra project is backed by a consortium of multinational companies and nonprofit organizations, with the goal of developing and globally implementing the technology. Out of the 28 members of the Libra association, Paypal is the first to exit.
All of the members of the association have agreed to help Facebook make its Libra cryptocurrency as the main way consumers do transactions online through their different platforms. All of the members have also agreed to pledge $10 million each, which are then placed in a common pot meant for the project.
PayPal did not immediately give any concrete reason for its decision to leave the Libra project. In a statement issued this week, PayPal only stated that it had decided to forgo any further participation in the association as it needed to focus on advancing its own business priorities.
The online payments giant did clarify that it still remains supportive of Facebook's plans for Libra. PayPal stated that Facebook remains to be a valued strategic partner and the company is willing to support the social media firm in other capacities.
Apart from PayPal, other companies within the Libra association have expressed their intention of leaving the group. Last week, a report from the Wall Street Journal had claimed that Mastercard and Visa were both reconsidering their involvement in the project.
Since the report was published, Visa had mentioned that their involvement in the association was only provisional. Visa's chief executive, Al Kelly, has reportedly told investors that the company was still in discussion to fully integrate into the association and the decision to join will lie solely on the project's ability to meet regulatory requirements.
Over the past few months, Libra has been met with increased scrutiny from global regulators. Some regulators, particular from the United States and in Belgium have claimed that Libra could be used to bypass financial regulations and could be used for illicit activities such as money launderings and tax evasion.
France was one of the first countries in the EU to express its intention of blocking Libra from the trading bloc. Meanwhile, the US had questioned Libra's financial underpinnings, receiving both support and criticism from different companies and agencies.
