The Libra coalition has been fraying for months. After Facebook announced the initiative, some of the partners began having second thoughts. Many were wary that Facebook’s regulatory issues and the uncertain legality of cryptocurrencies might hurt Libra. Some of the companies, particularly payments providers, rely on good relationships with financial regulators.
The partners had signed nonbinding agreements, so backing out would be fairly easy, executives at seven of the partner companies told The New York Times in June. They also weren’t obliged to use or promote the digital token.
“We will not do anything that we think doesn’t meet our own personal standards, as well as the standards of regulators that we respect around the world,” Al Kelly, Visa’s chief executive, told CNBC this year.
In recent months, as skepticism around Libra was mounting, some of the partners realized the amount of resources they would have to commit to the effort was growing, said one person with knowledge of the situation, who declined to be named because the discussions were confidential.
PayPal, which Mr. Marcus used to lead, said last week that it would leave the Libra initiative so it could instead “continue to focus on advancing our existing mission and business priorities.”
On Friday, Mr. Marcus thanked Visa and Mastercard “for sticking it out until the 11th hour” and pointed to how intense the regulatory pressure had been. In posts on Twitter, he said people should not read too much into the withdrawals.
“Of course, it’s not great news in the short term, but in a way it’s liberating,” he tweeted. “Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.”