When Facebook first started talking about introducing a stablecoin, it drummed up support from worldwide, established financial companies. Visa and MasterCard were two of these, but it’s amazing how viewpoints change once the truth settles in. Several major backers of the project that became known as Libra are now considering whether or not they want to continue offering their support.
The change in heart comes, in part, due to the negative backlash Facebook has received for Libra around the globe. A handful of countries have stated that they won’t no part of the project and won’t allow it inside their borders. Others, including the U.S., are still allocating resources to determine how viable Libra really is, given Facebook’s history of not being able to properly secure user and company data.
But, it goes even beyond that. According to a recent report by Bloomberg, Visa, MasterCard, Stripe and even PayPal are having second thoughts about officially signing Libra’s charter. This revelation comes to the surface as the financial powerhouses dig deeper into the inner workings of the program and may have realized that Facebook exaggerated Libra.
There is also concern that the companies might find themselves on the wrong end of regulators’ ire, leading them to be more cautious about endorsing Libra. According to Bloomberg, Facebook executives may have “oversold the extent to which regulators were comfortable with the project.”
Out of the four companies, three have remained mum on the subject, not willing to offer more input. Only Stripe has stepped forward to indicate that, despite the reservations, it doesn’t currently plan on changing its mind. A spokesperson with the company wouldn’t comment specifically on whether or not Stripe is going to sign the Libra charter, but stated, “Nothing has changed with our involvement with Libra since we came on to participate. We agreed to work on the charter with these other participants. We continue to work on the charter. We’re still actively involved.”
That Libra charter initially saw 28 entities step up and show their support as founding members of the Libra Association. Each is going to have to cough up $10 million to back Libra, but the money isn’t expected right away.
How many companies stay involved could begin to be revealed later this month. According to Facebook, the Libra charter is expected to be signed as early as October 14. In addition to the 28 founding members, the social media giant asserts that there are “hundreds” of other entities that want to join.
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