Ex-Facebook Libra backer Mastercard comes clean, explains why it dropped out

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When Facebook was preparing to introduce its Libra stablecoin project to the world, it asserted that it had support from financial giants like Visa, Mastercard, Stripe and others. Just as the clock was running out ahead of the official signing of the Libra Association charter, however, these global companies, as well as others, backed out, leaving Facebook without a single financial entity as part of the founding group of Libra members. Now, Mastercard has spoken out about its reasons for changing course, and they don’t speak highly of what Libra is trying to do.

Ari Sarker, the co-president of Mastercard Asia Pacific, participated in an interview with Bloomberg a few days ago, revealing the company’s relationship with Facebook and the Libra project. The credit card giant, according to Sarker, recognizes the power and capabilities of blockchain, but believes that Facebook is missing key components that would make Libra financially sound.

The executive stated, “I think the pullback from Libra was more determined by us in the manner that we are essentially a regulated entity where we work with a number of markets with supervision by central bank regulators and we’ve been very clear from day one that our partnership with Libra was recognizing those obligations and recognizing that we have commitments across our regulatory frameworks and therefore stay true to that.”

Apparently, Libra is not living up to those same obligations and isn’t ready to be a part of a global financial network. Upon closer examination of the project, Mastercard felt it needed to bow out because, “The intention really was that being inside the tent would allow us an opportunity to shape some of those conversations. We’ve stepped back because we felt some of those basic core tenets were not being adhered to,” according to Sarker.

The company isn’t opposed to integrating blockchain technology into its operations. Just the opposite—it is looking seriously at how to make it possible. Sarker didn’t specify any concrete plans, but indicated that Mastercard is looking at using blockchain to handle large transfers and to make them more transparent. Big business, and especially big finance, has recognized the possibilities blockchain can provide and is ready to take the plunge, as long as the technology can provide measures that allow the companies to comply with global financial regulations.