- Mastercard President and Chief Executive Officer Ajay Banga decided to withdraw from the Facebook Libra cryptocurrency project due to compliance issues
Mastercard President and Chief Executive Officer Ajay Banga decided to withdraw from the Facebook Libra cryptocurrency project due to compliance issues. Specifically, Banga said that Libra’s executives would not commit to observing laws and it was uncertain how the digital currency would generate revenue. Plus he was surprised about how Facebook was planning to store the coins in the Calibra digital wallets.
“When you don’t understand how money gets made, it gets made in ways you don’t like,” said Banga via Financial Times.
“Every time you talked to the main proponents of Libra, I said ‘Would you put that in writing?’ They wouldn’t,” Banga added.
Another concern Banga had was that Facebook pitched Libra as a decentralized network that was powered by a consortium of companies. However, Facebook was planning to have customers store their coins in the Calibra wallet. Having those coins stored in Facebook’s own wallet did not sound like an “altruistic idea” anymore.
The Facebook Libra digital currency program has been questioned by government regulators in the US and Europe. Back in October, US lawmakers questioned Facebook CEO Mark Zuckerberg about how financial data would be handled. And they questioned Facebook’s motives around the development of an alternative to dollars.
During the questioning on Capitol Hill, Zuckerberg said multiple times that Libra would have an independent association.
Facebook Head of Calibra David Marcus recently spoke at the World Economic Forum where he pointed out that innovation around cross-border payments and solving the issue of the unbanked was necessary.
“When we started this journey almost six months ago, the whole idea was not around a certain way of doing things, but more around ‘let’s come together and try to figure out how we solve a problem that is unacceptable’ — 1.7 billion people who are currently unbanked, another billion underserved,” said Marcus at the event via CoinTelegraph. “The same hasn’t happened with money. Some of the networks are 50 years old, the web is 30 years old. We still don’t have an easy, cheap, efficient way for people to have access to digital money and move it around. Personally I’m really excited that we’re having all these conversations now.”
