PayPal Holdings Inc has pulled out of Facebook Inc’s digital currency project, known as Libra, a blow to the social media company that has faced stronger-than-expected scrutiny over its proposed creation of an alternative payments system.

The digital payments company on Friday said that it is withdrawing from the Libra Association so it can focus on its existing businesses.

“Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities,” PayPal said.

Facebook has presented Libra as a currency that could be used for digital payments, particularly outside the US. It would be backed by real currency, unlike other digital currencies like bitcoin or etherium.

The Libra Association, based in Switzerland, was supposed to give the currency project a comfortable distance from Facebook, which would not own Libra.

Despite Facebook’s efforts, financial regulators as well as members of the US Congress have questioned the company’s motives for creating a new digital currency, particularly in light of criticisms that Facebook’s business model is too invasive of its users’ privacy.

US Representative Maxine Waters, chairwoman of the US House Financial Services Committee, has asked Facebook founder Mark Zuckerberg to testify in front of her committee before Libra is rolled out.

Along with privacy concerns, Waters’ has cited the potential for Libra to be used in money laundering and other financial crimes.

Calls have been made to make Facebook subject to US banking laws — a complicated prospect — if the social media company does move forward with the Libra project.

Facebook has reportedly hired Washington lobbyists to convince politicians to give their approval to Libra.

PayPal, which is based in San Jose, California, is the first company to publicly end its partnership with Libra, but other companies have been reportedly having second thoughts.

The Wall Street Journal last week reported that Mastercard Inc and Visa Inc, the world’s largest payment providers, were considering ending their Libra relationships.

The Libra Association said it plans to continue to move forward with the project without PayPal.

“Building [Libra] is a journey, not a destination … each organization that started this journey will have to make its own assessment of risks and rewards of being committed to seeing through the change that Libra promises,” said Dante Disparte, head of policy and communications for the Libra Association.