Mastercard CEO Ajay Banga cited concerns with compliance, data management, and making money within regulatory constraints among the reasons his company left the Facebook-led Libra Association late last year.
Banga, in an interview with the Financial Times published this week, says key members at the Libra Association would not assure him business at the cryptocurrency venture would be conducted in a manner “fully compliant with local law.”
“[E]very time you talked to the main proponents of Libra, I said, ‘Would you put that in writing?’ They wouldn’t,” Banga tells the Times.
“When you don’t understand how money gets made, it gets made in ways you don’t like.”
Mastercard CEO Ajay Banga
The Libra Association told Compliance Week it had no comment regarding Banga’s interview.
Mastercard was one of seven initial members to abandon the Libra Association last year amid increased regulatory scrutiny paid toward Facebook’s involvement. British telecommunications giant Vodafone recently confirmed it too has dropped out from the project to focus on its own money service, leaving the Association with 20 members as opposed to the 28 that were on board when the project was first announced last June.
Lyft, Uber, and Spotify are among those still affiliated, while PayU is the lone remaining payments company after Mastercard, Visa, and others jumped ship.
Part of Banga’s concerns were with how Libra would make money. “When you don’t understand how money gets made, it gets made in ways you don’t like,” he told the Times. Banga also expressed distrust toward Facebook’s planned subsidiary Calibra, which would act as a digital wallet for Libra.
“It went from this altruistic idea into their own wallet,” Banga told the Times. “I’m like: ‘This doesn’t sound right.’”
Facebook has adamantly defended its involvement in Libra, which was initially planned to be available as early as 2020. From the start, lawmakers in Washington D.C. and other countries have raised concerns over privacy, antitrust, and the like, causing the project to seemingly lose momentum.
Facebook itself acknowledged in a filing with the Securities and Exchange Commission last July that there can be no assurance Libra’s planned launch “will be made available in a timely manner, or at all.” The company noted its lack of experience in the digital currency sector “may adversely affect our ability to successfully develop and market these products and services.”
Still, as recently as October, when Libra formally announced the signees to its charter, the Association said that “over 1,500 entities have indicated interest in joining the Libra project effort, and approximately 180 entities have met the preliminary membership criteria.”
Upon its announcement, the Libra Association aimed to be comprised of 100 members, each paying $10 million for their spot.