SAN FRANCISCO — PayPal said on Friday that it had pulled out of the coalition of companies involved in a Facebook-backed cryptocurrency initiative, in the latest headache for the social network’s effort.
The proposed cryptocurrency, Libra, has been in the works at Facebook for more than a year and was announced to much fanfare in June. Libra was designed to function as a cryptocurrency that could be freely traded inside Facebook’s properties, like Messenger and WhatsApp, and would be used for international exchange. At the time, Facebook said more than 27 corporate partners — including Visa, Mastercard and companies like Uber — had pledged to support the project.
“PayPal has made the decision to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities,” a spokeswoman for PayPal, Amanda Coffee, wrote in an email on Friday.
PayPal’s decision is a blow to Facebook and its ambitions for Libra, which are based on the premise that Libra will be controlled not by Facebook but by a broad network of corporate partners.
The project encountered pitfalls almost immediately after it was announced. Regulators called in David Marcus, head of the Libra initiative and an executive at Facebook, for questioning in front of Congress. President Trump and other federal officials criticized the project, as did other politicians and central bankers around the world.
The negative response led many of the partners to quickly distance themselves from the project.
A Facebook spokeswoman did not immediately respond to a request for comment.
This is a developing story and will be updated.