Visa and Mastercard announced on Friday their withdrawal from the project of the pound cryptocurrency from Facebook, a possible fatal blow to the social network's plan to create a global digital currency.
Several other large companies have announced their intention not to handle the pound. The payment processing company Stripe said it would not participate in the project, as well as the eBay auction website.
PayPal was the first of Facebook's big pound partners to retire when it announced last week that it would no longer be involved.RELATED
Facebook faced strong criticism for its plans to create a private currency system that would allow payments across borders. The Swiss-based Libra Association should give the currency project a comfortable distance from Facebook, which would not be the owner of the pound.
Despite these efforts, financial regulators, as well as members of Congress of both parties, pointed out the privacy issues that would arise if Facebook controlled the currency, and raised concerns about money laundering. Even President Donald Trump tweeted that Facebook should be subject to US banking laws to continue with the project.
The impact that the loss of Visa and Mastercard will have in pounds cannot be underestimated. Both have an effective duopoly of credit and debit cards in the United States and Europe, and make significant progress in the payment systems of developing countries. His initial agreement to join the Libra Association gave instant legitimacy to the Facebook project. It would also give Facebook access to Visa and Mastercard networks, which could have created a way for users to change traditional currencies to pounds.
However, both companies clarified from the beginning that their interest in the pound was, at least in part, mere curiosity. Now it seems that the political pressure for Facebook to leave the project was enough to convince a part of the original members to cut ties.
Uber, Spotify and Lyft were still listed on Friday as members and none of them responded to requests for comment.
Associated Press journalist Barbara Ortutay in San Francisco contributed to this office.