The firm had hoped to revolutionise payments with a single digital currency.Read more
BBC Radio 4
Facebook's chief executive Mark Zuckerberg has faced hostile questioning in the US Congress about his plans to launch a new crypto-currency, Libra.
US politicians argue it could be abused by criminals.
But Mr Zuckerberg insisted it would be safe and that hesitation would leave the US playing catch up with China.
Fiona Cincotta, market analyst at City Index, tells the Today programme the project has been in trouble for a while: “There are still a lot of concerns over it’s safety and who would be backing it.”
Since it was announced in June, eight of the founding 28 financial institutions have pulled out, mostly due to regulatory concerns.
Ms Cincotta says given Facebook’s size it had been likely it would survive this but there are increasing fears this may not be the case: “There are almost more concerns with Facebook and Libra [than other cryptocurrencies]. It’s going to be a very, very slow-burning project.”
More on Facebook's Libra cryptocurrency.
It must not go ahead until the firm proves it is safe and secure, according to a report by the G7 group seen by the BBC.
In a blow to the social media giant, the world's biggest economies warned cryptocurrencies such as Libra pose a risk to the global financial system.
The draft report outlines nine major risks posed by such digital currencies.
It warns that even if Libra's backers address concerns, the project may not get approval from regulators.
BBC Radio 4
The future of Facebook's proposed digital currency Libra hangs in the balance, after several big backers and financial partners including Mastercard, Visa, eBay and payment firm Stripe pulled out on Friday.
Libra has faced fierce criticism from multiple governments and financial experts over its lack of regulation. Facebook was questioned by the US Congress in July for two days over Libra's intentions, and its chief executive Mark Zuckerberg is due to testify at a congressional hearing about Libra on Wednesday 23 October.
Today is meant to be the first meeting of the Libra Association - the group Facebook created to develop the virtual currency- but only one payment processing firm remains in its network.
"There's no two ways about it, it's a huge blow," Charlotte Jee, reporter at MIT Technology Review told BBC Radio 4's Today programme.
"Apparently part of the reason these partners have pulled out is also because Mark Zuckerberg himself is also going to appear on the 23rd in front of the House Committee and we will see what he has to say.
"[Libra] is damaged but still going to be continuing, just perhaps in a different form."
France's finance minister Bruno Le Maire has been speaking out about Facebook's Libra cryptocurrency.
Speaking at the Organisation for Economic Co-operation and Development, Mr Le Maire said: "This eventual privatisation of money contains risks of abuse of dominant position, risks to sovereignty, and risks for consumers and for companies."
"Libra also represents a systemic risk from the moment when you have two billion users. Any breakdown in the functioning of this currency, in the management of its reserves, could create considerable financial disruption.
"All these concerns about Libra are serious. I therefore want to say with plenty of clarity: in these conditions we cannot authorise the development of Libra on European soil."