JPMorgan Chase and Goldman Sachs have reportedly declined involvement in the Libra cryptocurrency project. As reported by Business Insider, these two companies feared the virtual currency could be used by criminals.
JPMorgan and Goldman Sachs Remain Far From Libra
JPMorgan Chase and Goldman Sachs would not be joining the Libra Association in charge of the cryptocurrency Facebook announced back in June 2019.
The decision to remain on the sides of the project is related to how the cryptocurrency could eventually be used to launder money and breaking the law.
The main goal was to launch Libra by mid-2020 after dealing with all the regulatory issues that could arise in an entire year.
The Libra Association included firms from different countries that were interested in participating in the Libra project.
During the last few weeks, some companies including PayPal, Visa, Mastercard, Stripe and Mercado Pago, decided to leave the association located in Geneva. Thus, these members left the project even before any official launch of the Libra cryptocurrency.
The Libra Association held its inaugural meeting that brought together executives from more than 20 firms to discuss the current situation of the Libra project.
The association discussed the basic governance rules and named five board members that include Xapo CEO Wences Casares, Andreessen Horowitz partner Katie Haun and David Marcus, the co-founder of the Libra project.
Many regulatory agencies around the world have been questioning Libra and how the cryptocurrency project could affect monetary policies, sovereignty and the whole financial system.
Moreover, regulators are worried about how companies and users will use the digital asset and whether it could eventually be used by criminals.
The Libra digital asset is expected to be backed by a basket of currencies that include the U.S. dollar, the euro, the British pound, the Singapore dollar and the Japanese yen. This would allow Libra to have a stable value compared to other cryptocurrencies in the market.
The Libra Association informed there are over 1,500 organizations that expressed interest in joining the Libra project. 180 of them meet the eligibility criteria to become full members. This would replace the companies that decided to step down from the initiative.
Before the official launch of the cryptocurrency, the Libra Association could eventually reach more than 100 members. However, we already know that JPMorgan Chase and Goldman Sachs are not going to be participating in this project.