Facebook's Libra faces support test

LONDON: Facebook’s Libra cryptocurrency faces a pivotal meeting of backers on Monday, days after the would-be digital coin project suffered a severe blow as major payment firms quit.

Mastercard and Visa abandoned the Geneva-based Libra Association on Friday, as did eBay, fintech startup Stripe and payments company Mercado Pago.

Politicians and regulators from the United States to Europe have said that Libra risks upsetting global financial stability, undermining users’ privacy and facilitating money laundering.

PayPal started the Libra Association exodus this month, leaving Facebook without the backing of any major payments firms for the project, due for launch by June 2020.

Libra said this month it would give details after the meeting of the 1,500 “entities” that have indicated “enthusiastic interest” to take part in the project.

Members will review a charter and appoint a board at the Libra meeting, which will be held in Geneva, the Wall Street Journal reported this month.

A spokeswoman did not immediately respond to enquiries on the meeting of the Libra Association, whose remaining members include Vodafone and ride-hailing firms Uber and Lyft.

It also includes non-profit organisations, venture capital groups and blockchain firms, but the departure of major financial firms presents a stumbling block for Libra’s efforts to convince regulators and politicians about the coin’s safety.

France last month pledged to block Libra from operating in Europe, with the Bank of England laying out high hurdles it must meet before its launch. U.S. Federal Reserve Chairman Jerome Powell has also suggested the project could not advance before concerns were met.