PayPal Holdings Inc. (NASDAQ: PYPL) has said that it will pull out of Facebook Inc.’s (NASDAQ: FB) Libra Association. PayPal intends to forgo any further participation in the group and will instead focus on its own core businesses.
The goal of the Libra association is to build and operate a Libra blockchain that will issue a Libra digital currency backed by a Libra Reserve of real assets (a stablecoin) that is “supported by a competitive network of exchanges buying and selling Libra.” Neither Facebook nor the Libra Association will own or operate a digital currency exchange.
Facebook’s partners include heavyweights like MasterCard, Visa, Uber, Lyft, Spotify, eBay and Vodafone, along with venture capital firms like Andreessen Horowitz and Union Square Ventures. Facebook hopes to have about 100 companies in the Libra Association by the target currency launch date in the first half of 2020, but this could be pushed back to deal with regulatory concerns.
However, there are other concerns with Libra as well. Visa and Mastercard are reconsidering their involvement in Libra, as they do not want to attract regulatory scrutiny, The Wall Street Journal reported earlier this month. Also, France and Germany last month pledged to block Libra from operating in Europe and backed the development of a public cryptocurrency instead.
PayPal said in a statement to Bloomberg:
PayPal has made the decision 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.
Shares of PayPal traded down about 0.5% on Monday to $102.33. The 52-week range is $74.66 to $121.48, and the consensus price target is $126.38.