Booking becomes the seventh member of the Libra Association

According to Bloomberg News, online travel company Booking Holdings Inc., which operates sites such as Kayak.com and Priceline.com, said it would withdraw from Libra, the social media giant's Facebook-led encryption project.

Booking also became the seventh company to announce its withdrawal in two weeks. The six companies that had previously withdrawn were PayPal, Stripe, Visa, Mastercard, MercadoLibre and EBay.

Five of the above six companies announced their withdrawal last Friday. The Libra Association plans to hold its first general meeting this week and select members of the board.

This is another major blow to Facebook's Libra project, with paying giant PayPal becoming the first member to leave the project a week ago. Since its announcement in June this year, the Libra project has been questioned by governments, central banks, and legislative and regulatory agencies from various countries.

On Monday, a report from the Group of Seven (G7) said that Facebook's Libra cryptocurrency could not continue until security was proven. This means that the world's largest economy has warned social media giants that its encryption project, Libra, poses a risk to the global financial system.

According to the BBC, the draft report lists the nine major risks associated with such cryptocurrencies. The draft also stated that even if Libra's supporters solved all the problems, the project may not be approved by the regulator.

The G-7 Task Force, which wrote the report, included senior officials from the Central Bank, the International Monetary Fund (IMF) and the Financial Stability Board. The report believes that digital currencies like Libra must be legally sound, protect consumers and ensure that the cryptocurrency is not used to launder money or finance terrorism.

The draft report mentioned that “the G7 believes that any stable currency project should not begin to operate until the legal and regulatory challenges and risks are fully resolved”. In addition, even if Libra's supporters meet the concerns raised by the government and the central bank, they still question the feasibility of the project. It stated that “solving such risks is not necessarily a guarantee for the regulator to approve the stable currency.”

US Treasury Secretary Steven Mnuchin said in an interview with CNBC on Monday that he is very clear "if the Libra Association does not meet our standards for money laundering and financial crime networks, we will take legal action."

He added, “I think they realize that they are not ready to meet the standards. Some partners will worry and quit before they reach regulatory standards.”

Facebook's encryption project, Libra, has received attention and question from governments, central banks, and regulatory and legislative bodies since its launch in June. The US House Financial Services Committee has asked Facebook CEO Mark Zuckerberg to attend the hearing on October 23, after he again went to Congress to testify since the 2018 discussion of the Cambridge company data scandal.

Although Libra project leader David Marcus has expressed Facebook and Libra's position at the hearing in July this year, the doubts of legislators have not been eliminated. Legislators believe that Libra should stop developing until the regulatory issue is completely resolved, and Facebook and Libra have not made a commitment.

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By Liang CHE

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