Vodafone has become the latest company to leave Facebook’s Libra digital currency project

By Dorothy 01/22/20 6:10 AM

The British company, Vodafone, became the latest major technology company to abandon the controversial Libra project, along with Visa, MasterCard, PayPal, eBay, Stripe, booking Holdings, and Mercado Pago. This is inflicting a fresh blow into the digital currency initiative led by Facebook.

The telecoms group is the eighth supporter to withdraw from the ambitious project, which faces strong scrutiny from global regulators and politicians on concerns that could facilitate money laundering and undermine financial stability.

Vodafone and Libra both confirmed Tuesday that the company is no longer part of the group. Vodafone will, instead, redirect its efforts to its mobile payment service, M-Pesa.

The Libra Association said in a statement: We can confirm that Vodafone is no longer a member of the Libra Association. Although the makeup of the Association members may change over time, the design of libra administration and technology ensures that the Libra payment system will remain resilient.

A Vodafone spokesperson said that, from the outset, we noted that Vodafone desires to make a genuine contribution to the expansion to include finance. We remain fully committed to that goal and feel that we can contribute the most by focusing our efforts on M-Pesa. We will continue to monitor the development of the Libra Association and do not exclude the possibility of future cooperation.

With Vodafone specifically leaving to focus on its related service and not due to apparent regulatory concerns, it scared other former members.

Facebook’s Libra

Facebook announced plans in June last year to lead the launch of a digital currency, dubbed Libra, saying it will enable fast, low-cost international payments online.

The Libra Alliance, a 27-member group of the majority of financial and technology companies, each agreed to contribute $ 10 million to launch the initiative. It was a member of the board that oversees its development.

However, seven of these original members – Mastercard, Visa, eBay, Stripe, PayPal, Mercado Pago, and Ticket Holdings – left October after a backlash and warning from some politicians that The project and any company involved in it will be closely monitored.

In mid-October, Facebook CEO Mark Zuckerberg faced questions from Congress. Since then, the Libra Association has worked to develop a blueprint for a Libra 2.0, addressing concerns of US regulators.

This cryptocurrency has been plagued by fears from lawmakers and regulatory authorities around the world. Facebook has promised that it will not launch the corresponding Calibra digital wallet until Libra is approved by U.S. regulators.

Libra stablecoin is intended to be a global payment instrument and will be supported by a basket of sovereign currencies, including US dollar, euro, British pound, and others.

Marketing materials for Libra and Calibra say 1.7 billion individuals worldwide remain closed from financial services. Libra is hoping to solve this problem by making it easy for individuals to transfer money from one person to another, a goal shared by Vodafone.