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Mastercard CEO explains why Facebook’s Libra project was abandoned

Facebook's Libra project was on shaky ground from the start and now Mastercard's chief executive has explained why the firm withdrew. 

During its debut in June 2019, Facebook said the cryptocurrency-based scheme would see virtual coins become integrated with the social network's services, including Messenger and WhatsApp, and would eventually expand into third-party networks and e-commerce. 

The Libra coin's underlying blockchain and digital wallet would be managed by a Facebook subsidiary, Calibra, and a consortium of financial and technology giants -- including Visa, Mastercard, PayPal, and Stripe -- were pegged as members of a consortium that would oversee and manage the system. 

Libra was touted as a new cryptocurrency-based financial service that could cross borders and potentially become a new currency heavyweight. 

However, the project's edges soon started to fray. 

US regulators branded Libra of "serious concern" and demanded answers to regulatory concerns. Europe and Singapore soon followed suit. 

See also: Facebook: Libra cryptocurrency will take decades to spread

Critics wondered if a company such as Facebook, which has continually experienced data breaches and has come under fire for its stance on user privacy in the past, should be permitted to reach a hand into the financial lives of its users. 

It wasn't long before the original backers of Libra began to reconsider their association. Visa, Mastercard, PayPal, and Stripe all withdrew last year. 

Now, Mastercard CEO Ajay Banga has explained why. In an interview with the Financial Times, the chief executive said that while he liked the idea, there were concerns not only related to compliance, but also the overall business model. 

After raising the issues of due diligence and compliance with local laws...

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