Mastercard CEO: Libra's financial inclusion has not met expectations and its compliance is too vague

Mastercard is one of many companies to end its partnership with Libra, as many top investors have withdrawn from Facebook's Libra project citing regulatory concerns. In a recent interview with the Financial Times, Mastercard CEO Ajay Banga claimed that the main members of the Libra Association would not make a hard commitment to "not do anything that is not fully compliant with local laws."

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Banga elaborated on the reasons why Mastercard withdrew from the Libra project, saying the company had to conduct due diligence through know-your-customer, anti-money laundering and data management. However, the CEO also said that Libra's performance seemed a bit vague.

“Every time I talk to a major Libra backer, I say, ‘Can you guys write this down?’ And the answer is no.”

In addition to security concerns, Mastercard is also skeptical about the medium through which Libra will generate profits. He pointed out that "when you don't understand how money is made, it is often made in a way you don't like." In addition to these existential doubts, Facebook positioned itself as a financial inclusion tool before announcing its intention to develop a proprietary digital wallet, Calibra. Banga explained:

“From this altruistic idea to developing their own wallet, I was like, ‘This doesn’t sound right.’ For financial inclusion, the government has to pay you in this currency, and you have to accept it as a tool that you understand and can use to buy rice and bicycles. If you receive Libra tokens, and the tokens go into a Calibra wallet, and then are converted into pounds to buy rice, I don’t understand how that works.”

However, according to Lisa Ellis, payments analyst at MoffettNathanson, blockchain-based payment systems could pose an “existential threat” to private networks like Mastercard, regardless of whether Libra is launched. However, Banga is not worried about this challenge, the CEO said:

"If the partners are not happy, they will blame you... Big banks are harder to negotiate than small banks. Big businessmen are harder to negotiate than small businessmen. Big governments are harder to negotiate than small governments. So the way China negotiates is different from Vietnam. That's the reality."

Original article: https://eng.ambcrypto.com/facebook-libras-financial-inclusion-failed-to-meet-mastercards-expectations//