Mastercard CEO Ajay Banga detailed in a recent interview why the payment giant left the Libra Association, Facebook-led company last year.
Speaking with Financial Times , CEO and President of Mastercard since 2009 revealed that the company began to see its position in the Libra Association in a different light when other project participants began to link cryptocurrency Poundto be launched soon, with a patented digital wallet called Calibra.
While other developers will be able to create their own Libra wallets, Mastercard did not like the idea. Banga said:
From this altruistic idea, he turned into his own wallet. It does not sound right.
For a 60-year-old CEO, financial inclusion would mean that the government could pay its citizens currency so that they could then use it directly for day-to-day operations, fully understanding how to do it. Banga noted that he does not understand how this will work if someone is paid in Libra to their Calibra wallet, then to move it again to buy goods.
Mastercard also revised its position in the Association due to the lack of a clear business model. According to its CEO, the Libra Association did not have an obvious way to capitalize on its users. Banga commented:
When you don’t understand how to make money, everything turns out the way you don’t like it.
He added that another red flag for Mastercard was other members of the association who were not firmly committed to the principle of “know your customer” (KYC), anti-money laundering (AML) and data management controls.
According to Crypto-hunter, Mastercard left the Libra Association in October 2019 at about the same time as its competitor Visa and eBay. At the time, a Visa spokesman said the project had failed "to meet all required regulatory expectations." PayPal was another Libra Association that withdrew from the project, while claiming that it is committed to focusing on its roadmap and financial inclusion.
Of the 28 founding members, eight have already left Libra. Vodafone was the last to leave, saying it would focus on internationally expanding its M-Pesa payment service, which is already "Africa's most successful mobile money service."
It is worth noting that Mastercard has a history of skepticism towards cryptocurrencies: Banga in the lecture of 2018 says that they are “garbage” and argues that they should not be considered as a means of exchange.