Several backers of Facebook’s planned Libra cryptocurrency are privately considering withdrawing their support due to the pressure from regulators, the Financial Times reported on 23 August.
According to the report, three companies, two of which are founding members of Facebook’s Libra Association, were holding discussions on what their “right next steps” should be. The two firms were expressing concerns over the regulatory spotlight the project has seen, while the third was worried about publicly supporting the venture as it could draw regulatory attention to their own businesses. One of the founding members said in an interview with the FT:
“I think it’s going to be difficult for partners who want to be seen as in compliance [with their own regulators] to be out there supporting [Libra]”
In mid June, Facebook announced its plans for its Libra project, and established a governance consortium called the Libra Association. The association had been joined by 28 founding members, among which were companies such as Visa, Mastercard, PayPal, Uber and Spotify. And since June Facebook has been under scrutiny, with regulators around the world raising concerns over Libra’s potential threat to financial stability. One of the project’s backers went as far as to say that:
“Some of those conversations [about regulation] should have taken place before the launch, to understand how regulators would think about this, so there wasn’t so much pushback.”
Two unnamed sources that are “close to the project” have stated that Facebook was becoming unhappy with the lack of support from the Libra Association members. One of Libra’s backers said that Facebook was getting “tired of being the only people putting their neck out.”
Both Facebook and the Libra Association reportedly declined to comment when contacted by the FT.