Libra: Two of the project backers are thinking of quitting

On 23^rd August 2019, at least two of Libra’s backers are considering backing out of the project Libra. The project had attracted about 28 entities as its backers. The two bodies cited growing pressure from regulators as their reason for calling it quits.

Accused of Antitrust Issues

It was recently reported that the EU has even moved further to investigate the Libra Association over antitrust matters. Lawmakers in the U.S. called for the immediate stop of Libra. They would want the project halted until Facebook addresses the regulatory issues. The FT said that it resulted in two firms considering backing out of the Libra project.

The 28 entities that joined the Libra project include some significant firms. These firms include Visa, Uber, PayPal, and Mastercard. Visa’s CEO said last month that the firms signed a nonbinding letter of intent to join Libra. As such, they were not yet fully committed to the enterprise.

Libra Faces Scrutiny Globally

Libra seems to be coming under scrutiny from governments around the world. The Chair of the U.S. Federal Reserve, the Senate Banking Committee, the Secretary of the U.S Treasury, the House Committee on Financial Services and the EU antitrust regulators have all expressed doubts about Libra. This makes it clear to see why some companies might be considering backing out.

One of the companies told the FT that it’s going to be difficult for partners who want to be seen as in compliance [with their regulators] to be out there publicly supporting Libra. A backer from Libra said that Facebook should have addressed the regulatory issues before it announced the project. This could have lessened the “pushback”, he added. No one within the group expected the amount of regulatory scrutiny that this attempt would ultimately receive.

Frustrations seem to be coming from both the Libra Association and Facebook. Sources say Facebook itself is unhappy that the Libra Association members aren’t voicing support to the project. And it is just as worried about being the only company currently with its “neck out” for regulators. Although Libra is yet to launch, it has been a significant flop this far. Most U.S financial regulators are cynical of Libra. Scammers are even using Libra to attract victims on YouTube. Something seems wrong about the whole venture, and almost nobody thinks that Libra is a good idea. As many people have pointed out, Libra is going to use blockchain when it doesn’t need to be in the blockchain. And with the new reports from the Financial Times, it makes it clear that even people from the inside are unclear about Libra’s future.