Three months after Mastercard and Visa pulled out of Libra, a cryptocurrency owned by Facebook, it seems the exit door is still open as another member of the Libra Association takes a bow. The new member exiting Libra is a telecommunications company, Vodafone.
Vodafone joined the growing list of Libra Association members, which have abandoned their quest to be part of a cryptocurrency projected to revolutionalise the currency world due to its backers. Before Vodafone, Paypal and eBay had also withdrawn their roles in Facebook’s digital currency.
This means about five members, which Facebook disclosed it would be launching Libra with, have exited in seven months of its announcement. To join the Libra Association, an upfront payment of $10 million is required.
Why is Vodafone leaving? The company said it wanted to focus on its mobile payment company, M-Pesa which leads the mobile payment market in Africa. Vodafone also said its leaving didn’t affect its commitment to financial inclusion goal.
Vodafone said it would contribute to the financial inclusion agenda through its mobile payment arm, M-Pesa.
“Vodafone Group has decided to withdraw from the Libra Association. We have said from the outset that Vodafone’s desire is to make a genuine contribution to extending financial inclusion. We remain fully committed to that goal and feel that we can make the most contribution by focusing our efforts on M-Pesa,” Vodafone’s statement read in part.
Vodafone might return in the future to pick up from where it left off, as it didn’t rule out a future return to the Libra Association.
“We will continue to monitor the development of the Libra Association and do not rule out the possibility of future co-operation.”
The controversial reason behind the exits? After Facebook announced its intention to go into digital currency, it was vehemently rejected by political leaders around the world. These governments believe Facebook’s Libra is a threat to their currencies.
There have been doubts that Libra might not get the regulatory approval needed to operate and already, public perception is against the digital currency, as the outburst from governments has portrayed it as a dangerous currency not to be used for trade.
The criticism is believed to be overwhelming for some of these Libra Association members. Also, fear of government clampdown on their other businesses is compelling some of them to rethink their association with Libra, factoring cost of a face-off with the government.
So, while Vodafone didn’t cite the face-off with the government as the reason for its exit from Libra Association, it’s believed to be a contributing factor that made the company quit the building of what is expected to be the biggest digital currency.