Facebook's cryptocurrency push takes a big hit as PayPal cuts ties with Libra

Stephen Lam/Reuters

• PayPal is dropping its association with Facebook's Libra cryptocurrency, Bloomberg first reported on Friday.
• The withdrawal is a huge hit to Facebook's push to establish its own cryptocurrency.
• The social media giant announced a partnership with more than two dozen other companies to found Libra, but multiple backers are reportedly reconsidering their involvement.
• Visit Business Insider's homepage for more stories.

PayPal announced on Friday that it will no longer be part of Facebook's Libra cryptocurrency project, Bloomberg's Sarah Frier first reported.

PayPal told Bloomberg that it remains "supportive of Libra's aspirations."

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PayPal was set to be one of the members of the Libra Association, a group of more than two dozen companies that originally planned to co-found Libra with a goal of rolling out the cryptocurrency by June 2020.

A Libra spokesperson confirmed that PayPal will not be joining the cryptocurrency in a statement to Business Insider.

Facebook first announced its plans to create Libra in July. In the months that followed, the proposed cryptocurrency has drawn scrutiny and concern from elected officials and Facebook users still reeling from a series of privacy scandals at the social network. Some lawmakers have even gone so far as to say that Facebook should halt its work on the project entirely.

Libra boss David Marcus spent hours in July being grilled by lawmakers on Capital Hill. The Facebook executive was previously president of PayPal.

Nervous about this heightened scrutiny, many of Libra's backers have avoided making public statements in favor of the cryptocurrency. Visa and Mastercard are among the members of the group who have backed away from publicly supporting Libra, according to The Wall Street Journal.

Apple CEO Tim Cook appeared to slam the cryptocurrency on Thursday, stating that companies like Facebook "shouldn't be looking to gain power this way."

A spokesperson for PayPal was not immediately available for comment.

In a statement to Business Insider, the Libra Association's head of policy and communications Dante Disparte said 1,500 entities have indicated that they're willing to participate in Libra.

"Building a modern, low-friction, high-security payment network that can empower billions of financially underserved people is a journey, not a destination. This journey to build a generational payment network like the Libra project is not an easy path. We recognize that change is hard, and that each organization that started this journey will have to make its own assessment of risks and rewards of being committed to seeing through the change that Libra promises. We look forward to the first Libra Council meeting in 10 days and will be sharing updates following that, including details of the 1,500 entities that have indicated enthusiastic interest to participate," Disparte said.