On Friday as four payment processors—Stripe, Visa, Mastercard, and Mercado Pago—withdrew from participation in the Libra Association, the Geneva-based group Facebook created to develop the virtual currency. eBay also announced its resignation Friday. eBay’s former subsidiary, PayPal, quit the group last week.
The timing is not a coincidence. The Libra Association is scheduled to hold its first official meeting on Monday. At that meeting, members will be asked to make binding commitments to the project. So for members who weren’t prepared to commit to the project, Friday was a good day to get out.
But this is an awkward development for Facebook. When the company introduced Libra earlier this year, it said it hoped to grow Libra’s membership from 27 companies to more than 100 by the time the Libra network launched in 2020. Instead, the association’s membership has fallen to 22 companies.
The even more ominous sign for Facebook is who bowed out. All but one of the payment-processing companies that originally signed up for Libra have now withdrawn (the one exception so far is Netherlands-based payment company PayU, which signaled its continued support on Wednesday). Their participation would have been significant because Libra faces a lot of criticism from regulators. Companies like Visa and Mastercard have ample experience with regulations related to payments and could have helped Libra navigate those issues. But they also had the most to lose from battle with regulators.
