PayPal leaves the Libra project! Will this have major implications in the crypto community?
PayPal seems to have finally had enough with the Libra regulation shenanigans and decided to leave the association to avoid any further collateral damage onto its own brand as well. The representatives of PayPal have outlined that even though they have decided to withdraw their brand from the association, it does not mean that they don’t support the Libra project. It was clearly outlined in the official comment that, PayPal executives have been collaborating with Facebook on multiple occasions and this small fluke in collaborations is nothing in the grand scheme of things.
The representatives from the side of Libra have also announced that they understand PayPal’s decision to withdraw from the association as the payments company has its own business goals and aspirations it needs to focus on more, such as the delivery of banking services to underbanked communities all over the world.
What caused the severance?
Although it was clearly outlined by PayPal representatives that they will be leaving the Libra Association due to personal business goals, it’s quite obvious to understand that the brand didn’t want to be associated with a project so hated by not only financial regulators but the community it was directly targeting as well. Hated, maybe a harsh word to be honest, but considering the criticism and the aversion the crypto community has been showing to this project, it’s quite clear that the future was not very bright.
Similar concerns were voiced by companies such as Visa, who’s CEO mentioned in an interview a month ago that Libra is far from a completed project, but should it deviate from the path it has already chosen, or should it have to face regulatory scrutiny all over the world, most participants wouldn’t hesitate to withdraw right then and there.
What type of damage will this cause to the project?
Although the members of the association don’t dedicate anything to the project besides some funds, it’s quite clear that the adoption of Libra on PayPal’s platform will be out of the question. This means that the world’s largest E-Wallet is very unlikely to recognize the cryptocurrency as a common medium of exchange.
This was predicted by several traders to be very damaging to streaming services as PayPal usually plays the role of the middle-man. Things such as donations and tips to streamers have been active for years now, as spectators can donate Bitcoin and Ethereum directly to their favorite streamer via a crypto wallet. Libra was supposed to be an immediate alternative with the PayPal platform, but now that’s become an impossibility. This is predicted to take effect on numerous eSports player salaries due to their reliance on donations and tips on their streaming accounts as well as social media.
Will this cause a domino effect?
Although the domino effect has been classified as nothing but an over-glorified argument for fear-mongering, this case may be the most relevant moment for its occurrence. For example, the domino effect usually takes place when a very influential member of a specific project, union or company decides to leave. This sends signals to other participants that if this influential figure has figured out that they want to leave, maybe it’s better than I do too.
Or, it could just be the initiator’s grace case, where everybody has been considering leaving the association, but nobody wanted to take the first step. What’s trying to be emphasized here is that the dissolvement of the Libra Association is quite possible from just one member calling it quits. Should that happen, then Facebook would not have the decentralization argument to back up the relevancy of its project anymore, thus introducing even more criticism from the community.