PayPal Drops Out Of Facebook’s Libra Cryptocurrency Amid Global Backlash

Apple CEO Tim Cook slammed it as a power grab, the Indian government refused to show interest and the European Commission is investigating its potential anti-competitive behaviour _ the ambitious Facebook’s Libra cryptocurrency has garnered opposition from all quarters across the world. Latest to add a jolt to the infamous Libra is the U.S payments processor PayPal Holdings Inc.

PayPal has become the first company to drop out of Facebook’s Libra Association, a cryptocurrency and related association, formed earlier this year to build global digital currency Libra, along with a chain of nearly 29 members.

“We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future,” PayPal said in a statement. It added that it would be focusing on its own core businesses and forego participation in the group. With the exit of PayPal, Libra Association now has 28 members, including Uber Technologies Inc, Lyft Inc and Spotify Technologies.

Responding to the exit, the non-profit Libra Association said in a statement, “The type of change that will reconfigure the financial system to be tilted towards people, not the institutions serving them, will be hard. Commitment to that mission is more important to us than anything else. We’re better off knowing about this lack of commitment now, rather than later.”

Other Setbacks By Mastercard, Visa

Mastercard is now reportedly planning to launch its own altcoin, according to a WSJ report. This move came as a shock last week, as Mastercard is one of the founding members of the Libra Association that plans to launch cryptocurrency next year.

The report further added that wary of attracting regulatory scrutiny, executives of some of Libra’s backers have declined Facebook’s requests to publicly support the project. Visa Inc., Mastercard Inc. and other financial partners that signed on to help build and maintain the Libra payments network, are reconsidering their involvement following a backlash from the US and European government officials.

Crypto In India: Clash Between RBI, IAMAI

The Internet and Mobile Association of India (IAMAI) told the Supreme Court last month that the Reserve Bank of India (RBI) had banned cryptocurrency on ‘moral grounds’. It said that no studies were conducted by the banking regulator to analyse if these virtual currencies were harmful.

The reaction came in after RBI’s circular in April 2018 barring banks from dealing in virtual currency and extending any services to the crypto community. It instructed all regulated financial services entities to exit relationships with companies and individuals dealing in virtual currencies and block all crypto-related transactions.

The IAMAI said while the underlying technology called blockchain was not in question, a total prohibition on cryptocurrency was uncalled for. It made a representation to the central bank on why rules, rather than restrictions, can address the concerns over cryptocurrency.

The RBI has now been asked to respond to the questions raised by cryptocurrency exchanges within two weeks in the Supreme Court of India, about the ban on cryptocurrencies. The Supreme Court sets the next hearing on Sept 25. Former finance minister Arun Jaitley had also earlier said the government doesn’t consider cryptocurrency as legal tender and would take all measures to eliminate payments using them.