Banking News

PayPal quits Libra Association

libra

Late on Friday, it was reported that PayPal had sent statements to the Wall Street Journal and Bloomberg confirming the company’s withdrawal from the Libra Association. It is the first firm to back out of Facebook’s cryptocurrency project following a rocky few months since its announcement.

The news comes days after rumors of PayPal getting cold feet over Libra’s regulatory criticism. As we published last week, it was the only firm not to attend a Washington meetup of the 28 Association members. The blow to Libra is exacerbated by the fact that project lead David Marcus was once president of PayPal.

Reportedly, the payments company decided “to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations.”

Apart from Libra, PayPal has shown support for identity firm Cambridge Blockchain. Though compared to Visa and Mastercard, it is not as active in the distributed ledger technology (DLT) space.

A hint to its other projects is a 70% acquisition of Chinese payments firm Guofubao, which runs GoPay. Announced last week, the transaction was approved by the People’s Bank of China (PBOC) and granted PayPal the first online payments license to a foreign company.

Though giants Alipay and WeChat dwarf GoPay, its online banking system is supported by the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank. The firm also provides tech solutions such as QR code based payments and cloud services. But nothing blockchain related so far.

It may be a coincidence that PayPal has entered the Chinese market with the permission of the PBOC amid the central bank’s preparations for its digital currency. Though one must admit the timing of PayPal’s exit from Libra days after its launch of services in the Libra-critical nation bears thinking about.