Ajay Banga said Facebook was unable to sufficiently address concerns about financial inclusion, compliance with local laws and a business model capable of generating money.
Mastercard was one of the original members of the Libra Association – a 28-member nonprofit organisation set up last year to oversee the roll-out of the cryptocurrency – but quit within months amid significant scrutiny from global regulators.
Other firms to quit the project include eBay, PayPal, Stripe, Visa and Vodafone, though Facebook remains committed to developing the cryptocurrency, which it claims would allow users around the world to make and receive payments through apps like Instagram, Messenger and WhatsApp.
When Facebook announced Libra last year, the technology giant said it would serve the 1.7 billion people in the world who do not have access to traditional financial services – the so-called ‘unbanked’.
Such promises of financial inclusion now appear to be in doubt, according to Mr Banga, due to the way the currency's digital wallet works.
“It went from this altruistic idea into their own wallet. I’m like: ‘This doesn’t sound right’,” he told the Financial Times.
“For financial inclusion, the government has got to pay you in this [currency], you’ve got to receive it as an instrument you can understand, and you have to be able to use it to buy rice and cycles. If you get paid in Libra... which go into Calibras [digital wallets], which go back into pounds to buy rice, I don’t understand how that works.”
Visa also cited concerns about financial inclusion when it pulled out, with the company saying it would instead focus its efforts on the the mobile payments platform M-Pesa.
The questions are part of the much broader scrutiny that has surrounded Libra since it was first unveiled in 2019.
Some politicians in the US and Europe have called for its development to be halted, with French finance minister Bruno Le Maire saying in September that he would block the development of Libra on European soil as it poses a threat to "monetary sovereignty".
More recently, Swiss finance minister Ueli Maurer said it would not be accepted by central banks and had therefore "failed" in its current form.
Libra's failure to commit to "not do anything that is not fully compliant with local law" was one of the reasons Mr Banga cited for Mastercard's withdrawal.
Libra did not immediately respond to a request for comment but has previously said the digital currency's development would continue regardless of partners pulling out.
Dante Disparte, head of policy at the Libra Association, said in a recent statement: "Although the makeup of the Association members may change over time, the design of Libra's governance and technology ensures the Libra payment system will remain resilient."
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