Mastercard CEO Ajay Banga has revealed reasons why the payments giant quit the Facebook-led Libra stablecoin project.
Firstly, Banga does not understand Libra’s business model. “When you don’t understand how money gets made, it gets made in ways you don’t like,” he told the Financial Times in an interview published Sunday. Concerns about Facebook’s data integrity was another reason.
Thirdly, Libra was initially positioned as a financial inclusion tool, but when it transited to a proprietary digital wallet, Calibra, it raised a red flag for Mastercard. “It went from this altruistic idea into their own wallet. I’m like: ‘this doesn’t sound right,’" said Banga.
The 60-year old CEO also had concerns when the Libra Association’s members would not firmly commit to compliance measures, such as know-your-customer (KYC) and anti-money laundering (AML) controls.
Mastercard quit the Libra Association last October, alongside its rival Visa and several other firms. The association started with 28 founding members in June, but over the months eight firms have left. Telecom major Vodafone was the latest to withdraw from Libra earlier this month when it decided to focus on its own payment products.