In an article in yesterday’s Financial Times (FT), Mastercard CEO Ajay Banga was forthright in his concerns about the Libra digital currency project. They include a lack of willingness to put verbal compliance commitments into writing. The absence of a clear business model could mean that money would be “made in ways you don’t like”. And discomfort over the altruistic financial inclusion concept alongside a proprietary digital wallet, Facebook’s Calibra.
Facebook’s Libra project initially had a raft of big names who expressed interest and were announced at the unveiling. A significant regulatory backlash followed. And when it came to signing up, most of the payments firms, as well as others, pulled out. They included Mastercard, Visa, Paypal, Stripe, eBay, Mercado Pago and Booking.com. Additionally, Vodafone withdrew just two weeks ago, leaving 20 remaining members such as Facebook’s Calibra wallet, Uber, Lyft and Spotify.
Last year, when Mastercard dropped out of the blockchain project, it set out a list of guidelines for involvement in other distributed ledger technology (DLT) projects. Any projects need to ensure consumer protection, both privacy and security, regulatory compliance and a level playing field for all stakeholders.
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