Mastercard and Visa shared the news that they are leaving the Libra project of Facebook. It is a major setback for the plan of the social media company that is planning to launch a digital currency.
With these two giants of payment companies, many other companies also announced that they will be leaving the Libra project. Stripe is also stepping out of the project along with the e-commerce company eBay.
PayPal announced last week that they will be leaving the Libra project and will not be involved with the project.
Since Facebook announced that they are going to launch their own currency system which makes it easier for the users to carry out payments across the border, they have faced a lot of criticism for it. The Libra project is based in Switzerland and it was supposed to be at a distance from Facebook so that it does not own Libra.
Financial regulators raised their concern over the privacy issues including the social network as to how they will manage the currency. It might also give another way to people to carry out money laundering just like Bitcoin and Ether. The American President, Donald Trump also said in a tweet, if the project from Facebook is going to move forward then they have to follow the baking rules of the United States.
The signing of the Libra is going to help within a week and all these five departures happened just before the deal.
The impact of Mastercard and Visa leaving Facebook projects cannot be expressed as they are the biggest players in the market who provide debit and credit cars to the Europe and U.S. which makes them important for the development of the currency. As the initial agreement of Facebook and Libra gave them legitimacy.