Facebook Libra partners reconsider backing crypto

WASHINGTON: Four payments companies that have joined Facebook Inc. as founding members of the Libra Association are wavering over whether to officially sign on to the cryptocurrency project, according to people familiar with the matter.

Visa Inc., Mastercard Inc., PayPal Holdings Inc. and Stripe Inc. are undecided about formally signing onto Libra’s organising charter because they’re concerned about maintaining positive relationships with regulators who have reservations about the project, the people said.

Executives at the payments companies believe Facebook oversold the extent to which regulators were comfortable with the project and are concerned about the perception the social network hasn’t behaved responsibly in other areas, the people said.

The Libra Association is asking the 28 founding members to reaffirm their commitment to the cryptocurrency project later this month, according to three people familiar with the matter. Before Libra was unveiled, the companies signed non-binding letters of intent to explore joining the association.

David Marcus, the Facebook executive leading the Libra effort, tweeted Wednesday that the “(first) wave of Libra Association members will be formalised in the weeks to come.” Marcus said he was unaware of any current Libra partners who might abstain from officially joining the organisation, but building a new global currency is “hard and requires courage.”

“I can tell you that we’re very calmly, and confidently working through the legitimate concerns that Libra has raised by bringing conversations about the value of digital currencies to the forefront,“he added.

Companies that officially join the charter won’t be obligated to immediately contribute an initial $10 million required to invest in the project, according to two of the people. The option to delay the payment reflects the association’s strategy to move the Libra project forward in baby steps, the people said.

Spokespersons for Facebook, Visa, Mastercard, PayPal and the Libra Association declined to comment.

VISA, MASTERCARD,

PAYPAL AND STRIPE ARE UNDECIDED ABOUT FORMALLY SIGNING ONTO LIBRA’S ORGANISING CHARTER