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Libra: PayPal first to drop out of Facebook cryptocurrency

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Libra: PayPal first to drop out of Facebook cryptocurrency

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PayPal was one of the first companies to join Facebook's planned cryptocurrency network

PayPal has become the first company to emerge from an alliance that is trying to launch Facebook's digital currency, Pound.

PayPal made the announcement in a statement on Friday, but did not specify what prompted the decision.

Libra, and its Calibra digital wallet, were unveiled by Facebook in June.

But cryptocurrency has been criticized by regulators, and both France and Germany have pledged to prevent it from Europe.

PayPal said it "[remained] supporting Libra's aspirations" but chose to focus on its own core businesses.

The company was one of the original members of the Libra Association, a group of 28 companies and nonprofit organizations that help develop Libra. Other members include payments company Visa, Uber and humanitarian charity Mercy Corps.

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In response to PayPal's withdrawal, the Libra Association said it was aware that it would be difficult to try to "reconfigure the financial system."

"Commitment to this mission is more important to us than anything else," he said in a statement. "We are better aware of this lack of commitment now."

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Facebook boss Mark Zuckerberg has been criticized for the company's data protection record

At this year's launch, Facebook said people could make currency payments through their own apps, as well as through WhatsApp messaging. Partner companies could also accept Pound for transactions.

Facebook said Libra would be independently managed and backed by real assets, and paying for it would be as easy as sending text messages.

But there were concerns about how money and people's data will be protected, as well as potential currency volatility.

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The Group of Seven advanced economies warned in July that it would not let Libra continue until all regulatory concerns were resolved.

Central bankers including Mark Carney of the United Kingdom also expressed skepticism, and US President Donald Trump tweeted that he "is not a fan" of the coin.

The Libra Association will hold the first meeting of its governing body – the Libra Council – on October 14.

The group said in a tweet that it planned to share updates shortly thereafter, "about 1,500 entities that showed enthusiastic interest in participating".

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