Two US Senators have taken it upon themselves to write letters directly to the heads of three payment companies that were, until yesterday, a part of the Libra Association.
In these letters, Senators Brian Schatz (D-HI) and Sherrod Brown (D-OH), have threatened: “If you take this on, you can expect a high level of scrutiny from regulators.”
Libra continues to face regulatory pressure from all facets of global government and regulators. The Senate has had its say on Libra directly, calling the project before the House to outline the concerns over the creation of a new currency by a private entity, as BeInCrypto has previously reported. It has also been hauled across the coals in France and Germany, specifically, again for its threat to national currency sovereignty.
The regulatory pressure has started weighing on the minds of many of the association members, with PayPal already named as the first to drop out. MasterCard, Visa, and Stripe did the same just a week afterward, as BeInCrypto has also reported. With this chink in the armor, senators may start going after other companies that are a part of the Association.
The letter, penned identically and sent to Patrick Collison, co-founder and CEO of Stripe; Ajaypal Singh Banga, CEO and president of Mastercard, and Alfred F. Kelly Jr. Chairman and CEO of Visa; begins with the Senators’ concerns over the Libra project and the association.
The Senators go on to spell out their concerns which circle around the fact that “key questions remain unanswered about the risks the project poses to consumers, regulated financial institutions, and the global financial system.”
They then go on to have a dig at Facebook, citing public reports that suggest that these Libra members themselves have been mostly left in the dark about the risks that Libra poses, and how these risks will be addressed. They state that Facebook has not made any assurances as to how Libra will be protected from misuse, such as facilitating criminal and terrorist funding.
The facebook bashing does not stop there as the Senators then start to take swipes at Facebook’s own issues surrounding privacy, disinformation, election interference, discrimination, and fraud. The two lawmakers even go so far as to cite a New York Times report on the proliferation of online child sexual abuse due to platforms like Facebook.
A Sinking Ship
While the Senators may be overly eager in their attack on Libra, and Facebook, in particular, their conclusion still rings true for members of Libra who must be seriously considering the value of remaining a part of this under fire project.
“We urge you to proceed with caution until Facebook is able to provide real answers to you, Congress, and financial regulators about how it will manage the significant risks posed by Libra,” the letter closes, with one more parting shot for Facebook. “We also urge you to consider Facebook’s inability to manage current risks from its core business lines when making a decision about whether to proceed with Libra.”
Do you think Libra will ever launch? And if so, will it do so with the support of many of the founding members of the association or are the risks too big for these major enterprises?
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