Mastercard CEO Ajay Banga says his company left the Libra Association after his stance on the project deteriorated due to proposals to link the coin to its own integrated wallet, Calibra, as well as the lack of a clear business model.
In an interview with the Financial Times, the payment service provider, who has headed Mastercard since 2009, described the various red flags that led to his decision to withdraw the company from the project. “It went from this altruistic idea to your own wallet. I’m like, ‘That doesn’t sound right’ “ said Banga and added “When you get paid in Libra[coin]. . . who go to calibras, who go back in pounds to buy rice, I don’t understand how that works. “
He also described the lack of a clear business model as worrying, he saw no obvious way in which Libra could become profitable, and pointed out fears that the members of the association would not commit themselves to combating money laundering or data management. The lack of care in user security was a major argument for the rejection of the project by the regulators, with Facebook’s poor track record in data management and abuse being regularly cited as reasons for blocking the development of Libra.
Mastercard left the project in October, along with PayPal and Visa, just as the official charter establishing the Libra Association, the non-profit organization overseeing the project, was signed in Geneva. The association originally consisted of 28 members; However, the project’s high level of regulatory scrutiny resulted in several prominent defectors, with only 20 members remaining on board.
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Last week, British telecommunications giant Vodafone said goodbye to Libra as the youngest founding member, although the reasons seem more amicable than Mastercard’s. Instead, Vodafone wants to concentrate on its own digital payment service M-Pesa, which is to be expanded beyond the current six African countries. However, a Vodafone spokesperson left the door open for a return, saying the company won’t rule out the possibility of future collaboration.
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