Facebook's Libra Cryptocurrency Plans Dealt Fresh Blow as Another Major Partner Abandons Project

Vodafone is the latest firm to abandon Facebook's Libra Association, another blow to the social network's cryptocurrency plans after the exit of Visa and Mastercard.

Several large brands have left the project since it was first announced last June, mostly citing concerns about financial regulation, piling pressure on the Facebook subsidiary's hopes of creating a crypto coin that could be implemented into Messenger and WhatsApp.

"We can confirm Vodafone is no longer a member of the Libra Association," Dante Disparte, Libra's head of communications, told Newsweek.

"Although the makeup of the Association members may change over time, the design of Libra's governance and technology ensures the Libra payment system will remain resilient," the executive added in a statement today, sent via email.

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Disparte noted that plans remain ongoing, saying: "The Association is continuing the work to achieve a safe, transparent, and consumer-friendly implementation of the Libra payment system."

At its core, The Libra Association is made up of organizations that help to maintain the payment system, create the underlying infrastructure and make policy decisions. But as opposition to the plan spiked, it was the payment processing giants that were first to jump ship.

As first reported by CoinDesk, Vodafone has spun the decision to leave Libra as a move to focus on its own mobile money transfer service, which is already popular in Africa.

A spokesperson for the telecom said: "Vodafone Group has decided to withdraw from the Libra Association. We have said from the outset that Vodafone's desire is to make a genuine contribution to extending financial inclusion. We remain fully committed to that goal and feel we can make the most contribution by focusing our efforts on [payment service] M-Pesa."

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Facebook first announced last June that Calibra, a digital wallet for the Libra coin, would launch at some point in 2020. It remains unclear how those plans are progressing.

Last year, politicians across the globe spoke out against the scheme, saying it had the potential to disrupt the financial system and criticized its links to Facebook. "We'd be crazy to give them a chance to let them experiment with people's bank accounts," Democratic Senator Sherrod Brown, ranking member of the Senate Banking Committee, said last July, Reuters reported.

By October, the payment firms started dropping.

"Visa has decided not to join the Libra Association at this time," a spokesperson for that firm said. "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."

PayPal said it would "forgo further participation" in the association but would continue to "strive to democratize access to financial services for underserved populations ." Stripe said Libra had "potential" and it would be "open to working with the Libra Association at a later stage."

Mastercard confirmed in a blog that it had withdrawn from the Libra membership process, and eBay said it had also "made the decision to not move forward as a founding member."

"I would caution against reading the fate of Libra into this update," David Marcus, the co-creator of Libra who is leading the cryptocurrency project, wrote in a Twitter post at the time

"Of course, it's not great news in the short term, but in a way it's liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you're onto something when so much pressure builds up," he added. Marcus does not appear to have tweeted since January 8.

Facebook has been contacted for additional comment.

Libra logo
In this photo illustration, a visual representation of digital cryptocurrency coins sit on display in front of a Libra logo on October 21, 2019 in Paris, France. Chesnot/Getty
Facebook's Libra Cryptocurrency Plans Dealt Fresh Blow as Another Major Partner Abandons Project | Tech & Science