“Visa has decided not to join the Libra Association at this time,” the company said in a statement. “We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations.”
South African portal TechCentral cited Naspers CEO Bob van Dijk as saying the company remains a committed member of the Libra Association via its PayU subsidiary as what attracted it is still valid. Van Dijk said the philosophy behind Libra is very positive. Naspers and PayU have no intention of following PayPal’s lead, Van Dijk said.
He said PayU enables people in markets where credit cards are not present to participate in the online economy, noting that Libra is aimed at people who have limited options to pay.
Van Dijk said regulation in many areas, including the cryptocurrency space, is "overdue", but added that it is incumbent on consumer internet companies, including Naspers, to behave in a responsible way and "to do well by their customers".
Regulatory dangers
The departing groups became uneasy about regulatory requirements around fraud, money laundering and sanctions enforcement, and how they might be responsible for any rule breaking using the blockchain-based currency.
US Senators Sherrod Brown and Brian Schatz wrote to the departing companies: “Facebook appears to want the benefits of engaging in financial activities without the responsibility of being regulated as a financial services company.” They noted: “If you take this on, you can expect a high level of scrutiny from regulators not only on Libra-related payment activities, but on all activities.”
Libra project to continue
Facebook’s head of the project, former PayPal executive David Marcus, cautioned on Twitter against “reading the fate of Libra into this update,” although he acknowledged “it’s not great news in the short term.”
All founding members were set to meet in Geneva for the Libra Council meeting on 14 October. That meeting will still take place, Facebook head of policy and communication Dante Disparte said, Reuters reported.
“We are focused on moving forward and continuing to build a strong association of some of the world’s leading enterprises, social impact organizations and other stakeholders,” he said. “Although the makeup of the Association members may grow and change over time, the design principle of Libra’s governance and technology, along with the open nature of this project ensures the Libra payment network will remain resilient,” Disparte said.
International scrutiny, CEO to testify in the US
Facebook had planned to launch its digital currency in June 2020. Libra attracted intense scrutiny from governments, who said the currency could be used by terrorists and money launderers. The governments said the project could also infringe privacy and consumer protections rules and generally threaten financial stability.
Facebook CEO Mark Zuckerberg will be testifying before the US House Financial Services Committee on 23 October. US Representative Maxine Waters, who chairs the panel, has repeatedly called on Facebook to shelve the project.
