Libra, Facebook’s ambitious but controversial cryptocurrency project, took a hit on Friday as five founding members of the association backing the global coin dropped out. Online marketplace eBay, payments provider Stripe and financial services giants Visa and Mastercard all said they’re no longer participating in the Libra Association, the nonprofit overseeing the project. Mercado Libre’s online payments platform Mercado Pago has also left, Libra confirmed.
The departures, which followa week earlier, deal the project a serious blow. All five companies brought expertise in payments and transfers technology. Analysts say Libra needs that knowledge to make its cryptocurrency a success.
“We believe Libra will fail without the involvement of the major payments players, as they bring essential, deep payments expertise, trusted payments brands, global acceptance and settlement networks, and relationships with every major financial institution, government, and regulatory body around the world,” according to a note written by analysts at MoffettNathanson.
The departures, earlier reported by The Financial Times, Bloomberg and the BBC, come amid mounting criticism of the Libra project, which was unveiled in June and immediately met . David Marcus, Facebook’s blockchain boss, several weeks later, while Facebook CEO Mark Zuckerberg is expected to be when he appears on Capitol Hill later this month.
The project has also been met with criticism in Europe andwith regulators complaining the details of the cryptocurrency haven’t been explained fully.
The Libra Association acknowledged the departures, which come ahead of its inaugural meeting on Oct. 14 in Geneva. The timing of that gathering, which is still scheduled to take place, may be contributing to the rash of departures.
“Although the makeup of the association members may grow and change over time, the design principle of Libra’s governance and technology, along with the open nature of this project ensures the Libra payment network will remain resilient,” Dante Disparte, the Libra Association’s head of policy and communication, said in a statement.
Tweeting on the departures Friday afternoon, Marcus thanked Mastercard and Visa “for sticking it out until the 11th hour” despite intense pressure.
“I would caution against reading the fate of Libra into this update,” Marcus added on Twitter. “Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.”
Libra is a proposed global digital coin that will be managed by the Libra Association, a de facto monetary authority that Facebook hoped would have as many as 100 partners by the time it’s scheduled launch next year. The members were expected to run nodes to help facilitate transactions on the Libra network, and pony up $10 million to get Libra going. Some of the initial members include Uber, Coinbase, Lyft and Spotify.
On Monday, Booking Holdings, an online travel company that runs sites including Priceline, Kayak and OpenTable, confirmed that it withdrew from the Libra Association.
Of the remaining Libra Association founding members, Mercy Corps, Anchorage, Kiva, Andreessen Horowitz and Iliad have all said they remain committed to the project. A Mercy Corps spokesperson told CNET in an email it’s remaining to ensure “the voice of the world’s most vulnerable people are heard in the formation of this initiative, and that digital financial services include them and their needs.”
Anchorage President and co-founder Diogo Monica added his company is “proud to be a founding member,” while Andreessen Horowitz spokeswoman Nina Suthers said that company plans to be in Geneva for the Libra meeting Monday.
Illiad founder Xavier Niel called Libra “inevitable” in French newspaper les Echos on Sunday, according to a translated version sent to CNET by Iliad. He called Libra “a reliable, constructive, exacting project.”
“Being scared of it won’t stop it from happening, so our priority needs to be to accompany this change and to make it possible and accessible,” Niel wrote. “While some worries may be legitimate, we need to provide answers without trying to prohibit it before even gauging the benefits it can bring.
CNET has also reached out to PayU, Lyft, Spotify, Uber, Vodafone, Coinbase, FarFetch, Union Square Ventures, BisonTrails, Xapo, Women’s World Banking, Breakthrough Initiatives, Ribbit Capital, Thrive Capital and Creative Destruction Lab for confirmation on whether they intend to remain part of the Libra Association.
CNET’s Queen Wong and Ben Fox Rubin also contributed to this report.
Originally published Oct. 11, 12:52 p.m. PT.
Update, 1:42 p.m. PT: Adds context. Update, 1:51 p.m. PT: Adds Stripe comment; Update, 2:45 p.m. PT: Restructures, adds analyst comment, Libra statement; Update, 2:52 p.m. PT: Adds confirmation and comment from Mercy Corps, Anchorage and Kiva; Adds report on Mercado; Update, 3:09 p.m. PT: Adds Libra confirming Mercado Libre’s departure; Update, 4:30 p.m. PT: Adds confirmation from Andreessen Horowitz, CNET has reached out to all other founding members; Update, 4:39 p.m. PT: Adds tweets from Marcus.
Update, Oct. 14 at 8:43 a.m. PT: Adds that Booking Holdings has pulled out of the Libra Association; Update, 1:30 p.m. PT: Adds statement from Iliad.