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Libra Loses a Quarter of Its Members as Booking Holdings Exits

Published 15/10/2019, 03:41 am
© Reuters.  Libra Loses a Quarter of Its Members as Booking Holdings Exits
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(Bloomberg) -- The Libra Association hasn’t officially launched but has already lost a quarter of its membership, as Booking Holdings Inc., an online travel company that operates websites including Kayak.com and Priceline.com (NASDAQ:BKNG), joined Visa Inc (NYSE:V)., Mastercard Inc (NYSE:MA). and four other companies in leaving the controversial cryptocurrency project spearheaded by Facebook Inc (NASDAQ:FB).

With the departure of Norwalk, Connecticut-based Booking (NASDAQ:BKNG), the Libra Association now has 21 founding members remaining of the original 28 companies that signed on to the association in June. PayPal Holdings Inc (NASDAQ:PYPL)., Stripe Inc., MercadoLibre (NASDAQ:MELI) Inc. and EBay Inc. in the past two weeks have also said they would abandon the project.

The remaining members of the Libra Association, a nonprofit that would manage the cryptocurrency, planned to meet Monday in Geneva, Switzerland to finalize its governing charter and initial membership.

Libra came under intense scrutiny from lawmakers and regulators as soon as Facebook (NASDAQ:FB) announced the project. Regulators warned that the cryptocurrency, originally set to launch next year, could be used by criminals if not properly monitored, while lawmakers pilloried Facebook’s track record at hearings in July with Libra co-founder David Marcus.

Officials in some countries, including Germany and France, announced that they would ban Libra, saying that the currency could be a threat to monetary policy, among other concerns.

Visa (NYSE:V), Mastercard (NYSE:MA) and Stripe left the project shortly after receiving a letter from Democratic senators Brian Schatz of Hawaii and Sherrod Brown of Ohio, warning that they could face increased scrutiny if they stayed on board.

Brian Armstrong, the CEO of Libra-member Coinbase Inc., on Sunday said the pressure felt “un-American.” “Why the need for the intimidation tactics? This would be called anti-competitive/monopolistic behavior if any private company did it,” Armstrong wrote on Twitter.

In the face of the departures, Libra has said more than 1,500 companies have expressed interest in joining the association and that the currency wouldn’t launch until it satisfied regulators’ concerns.

Developers have continued to advance the open-source code that would underlie Libra. However, Visa (NYSE:V), Mastercard (NYSE:MA) and PayPal could have provided critical experience in navigating U.S. financial regulators’ concerns, making their departures particularly painful. Booking (NASDAQ:BKNG) Holdings, which has a market capitalization of more than $84 billion, was among the only remaining large, publicly held companies left in the project.

Facebook (NASDAQ:FB) Chief Executive Officer Mark Zuckerberg plans to testify next week at the House Financial Services Committee on Libra, among other topics.

Representatives for the Libra Association didn’t immediately respond to a request for comment.

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