Saturday 5 October 2019 1:52 pm

Paypal first firm to drop out of Facebook's Libra cryptocurrency

Paypal has pulled out of an alliance attempting to launch Facebook’s digital currency Libra.

The payment firm announced its decision on Friday in a statement but did not reveal why the decision has been made.

The cryptocurrency and its digital wallet, Calibra, were revealed by Facebook in June.

Read more: Libra co-founder hits out at secrecy claims

It comes after Libra received a lot of criticism from regulators, with both France and Germany pledging to block it from Europe.

Paypal said it “[remained] supportive of Libra’s aspirations” but wanted to focus on its own core businesses.

In response to the firm’s withdraw, the Libra Association said attempts to “reconfigure the financial system” would be hard.

“Commitment to that mission is more important to us than anything else,” it said in a statement. “We’re better off knowing about this lack of commitment now.”

Paypal was one of the original members of the association, which has 28 companies and non-profits helping to develop the product.

Fellow payment firm Visa is among them, along with ride-hailing app Uber.

Facebook said people would be able to use the currency to make payments on its apps and that partner firms would accept it for transactions.

There have been concerns regarding the protection of data and money and potential for volatility of the currency.

Central bank chiefs, including the Bank of England’s Mark Carney, have also voiced scepticism, while US President Donald Trump said he is “not a fan” of the currency.

Read more: Why AirBnB, Paypal and Spotify are paying hackers to break their security

The first meeting of the association’s governing body, the Libra Council, will be on 14 October with updates to follow soon afterwards.

The group said that so far, “1,500 entities that have indicated enthusiastic interest to participate”.