PayPal becomes first member to exit Facebook's Libra Association

Representations of virtual currency are displayed in front of the Libra

U.S. payments processor PayPal Holdings Inc said yesterday it was leaving Libra Association, the entity managing the Facebook-led effort to build global digital currency Libra, making it the first member to exit the group.

Prior to this announcement, a report from the Financial Times indicated that PayPal was trying to distance itself from Libra for a couple of reasons - including the heavy scrutiny the cryptocurrency was facing by regulators and Facebook not putting enough attention/care towards said criticism.

The move by PayPal underscores the challenges that Facebook and its partners that are part of the Libra Association face as the group tries to get the cryptocurrency off the ground. Facebook's blockchain team also has many former PayPal employees.

It's now unsure how PayPal's announcement shakes up the association's plans or Libra's planned 2020 debut moving forward; the group's head of policy and communications, Dante Disparte, doesn't mention it in their statement provided to Gizmodo, preferring instead to focus on the "boldness" and "fortitude" required of its supporters in this "generational opportunity", which makes Libra sound more like a Star Trek expedition than a cryptocurrency scheme. The organization has asked these members to reaffirm their commitment to the project later this month. The global payments giant becomes the first founding member of Libra to officially depart the project.

"We recognize that change is hard and that each organization that started this journey will have to make its own assessment of risks and rewards of being committed to seeing through the change that Libra promises", Dante Disparte, head of policy and communications for the Libra Association, said in an emailed statement.

The first Libra Council meeting is scheduled for later this month.

This follows backlash from US and European government officials, people familiar with the matter told the Wall Street Journal. "Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities", the statement read.

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