PayPal pulls out of Facebook's cryptocurrency venture Libra

Libra has courted controversy from lawmakers and more since it was announced.

October 7, 2019, 10:34 AM

PayPal announced it is pulling its participation in Facebook's cryptocurrency venture Libra, despite supporting it since its founding.

"PayPal has made the decision to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations," PayPal told ABC News in a statement Monday.

The statement added that the company will "remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future" and noted that Facebook has been a "valued strategic partner to PayPal" who it hopes to continue to work with in the future.

Libra confirmed PayPal's withdrawal to ABC News and Dante Disparte, the head of policy and communications for Libra, told ABC News in a statement that they were better off knowing about their lack of commitment "now, rather than later."

"It requires a certain boldness and fortitude to take on an endeavor as ambitious as Libra - a generational opportunity to get things right and improve financial inclusion. The journey will be long and challenging," Disparte said.

"The type of change that will reconfigure the financial system to be tilted towards people, not the institutions serving them, will be hard," the statement added. "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."

Facebook announced in June that it would launch Libra, its own cryptocurrency, in 2020, and faced almost immediate backlash.

“Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” Federal Reserve Chairman Jerome Powell said at a U.S. House of Representatives Financial Services Committee hearing in July. "These are concerns that should be thoroughly and publicly addressed before proceeding."

Dan Schulman, the president and CEO of PayPal, said in a statement as Libra was being founded earlier this year that his company is "pleased to join other leading technology and financial servicesorganizations to form Libra, with the goal of exploring a new, global digital currency, built on blockchain technology."

News that PayPal is pulling out of Libra comes after reports that other founding organizations are having second thoughts as well.

Last week, The Wall Street Journal reported that Visa Inc., and MasterCard Inc., among others were reconsidering their involvement in Libra, citing anonymous sources familiar with the matter.

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