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.
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.
Of the remaining Libra Association founding members, Mercy Corps, Anchorage, Kiva and Andreessen Horowitz 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.
CNET has also reached out to PayU, Lyft, Spotify, Uber, Vodafone, Coinbase, FarFetch, Booking Holdings, Union Square Ventures, BisonTrails, Xapo, Women’s World Banking, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Iliad 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.