Cracks are forming in the coalition Facebook Inc. assembled to build a global cryptocurrency-based payments network.
Visa Inc., Mastercard Inc. and other key financial partners that signed on to help build and maintain the Libra payments network are reconsidering their involvement following backlash from U.S. and European government officials, according to people familiar with the matter. Wary of attracting regulatory scrutiny, executives of some of Libra’s backers have declined Facebook’s requests to publicly support the project, the people said.
Their reluctance has Facebook scrambling to keep Libra on track. Policy executives from Libra’s more than two dozen backers—a group called the Libra Association—have been summoned to a meeting in Washington, D.C., Thursday, according to people familiar with the matter. On Oct. 14, representatives from the companies are slated to meet in Geneva to review a charter for the Libra Association and appoint a board of directors, according to a memo reviewed by The Wall Street Journal.
Major defections could imperil Libra, Facebook’s audacious attempt to convince consumers to swap their national currencies for a digital coin that could be used to pay for goods and services on the internet. Without a network of financial partners that could help transfer currencies into Libra and global retailers to accept it as a form of payment, Libra’s reach would be limited.