Telecom major Vodafone has joined the list of top companies that have backed out from Facebook's controversial Libra cryptocurrency project. Vodafone joins PayPal, Mastercard, Visa, Mercado Pago, eBay, Stripe and Booking Holdings in withdrawing from the controversial project -- and is the first company to exit after the Libra Association was formed in October last year, Coindesk reported on Tuesday.
The companies have left owing to concerns about heightened regulatory scrutiny and users' data privacy. "We can confirm that Vodafone is no longer a member of the Libra Association. Although the makeup of the Association members may change over time, the design of Libra's governance and technology ensures the Libra payment system will remain resilient," the Libra Association said in a statement. "The Association is continuing the work to achieve a safe, transparent, and consumer-friendly implementation of the Libra payment system."
Opposition from US senators
Despite top-notch firms pulling out, Facebook and 20 partner organisations formally joined the digital currency Libra project in Geneva in October. The Libra Association said that more than 1,500 entities have expressed an interest in joining the digital currency project. Several US senators have opposed Facebook's digital coin, arguing that the social networking giant has been irresponsible with user data privacy. They have even called the digital cryptocurrency Libra "delusional" and "dangerous".
Facebook CEO Mark Zuckerberg testified before Congress in October about Libra, defending the idea, but acknowledging the struggles left to overcome. In a six-hour grilling at a House Financial Services Committee hearing, both Democrat and Republican lawmakers expressed dissatisfaction with Facebook's cryptocurrency plans.
Failed in its current form
"As I have examined Facebook's various problems, I have come to the conclusion that it would be beneficial for all if Facebook concentrates on addressing its many existing deficiencies and failures before proceeding any further on the Libra project," said California Representative Maxine Waters. "Facebook's internal motto was for a long time 'move fast and break things.' Mr. Zuckerberg, we do not want to break the international monetary system," added New York Democrat Nydia Velazquez.
Libra has failed in its current form, according to the President of Switzerland. In a media interview, Swiss President and Finance Minister Ueli Maurer stated that Libra does not have a chance of being successful "because the basket of currencies that is deposited in this currency is not accepted by the national (central) banks". "The project in this form has actually failed," Maurer was quoted as saying. The Libra project, which is still in development, aims for the launch of its first version this year.