Senators Urge Visa, Mastercard to Reconsider Involvement with the Libra Association
Members of the Libra Association are now facing pressure to reconsider their involvement with Facebook’s cryptocurrency. This week, Senator Brian Schatz (D-HI) and Senator Sherrod Brown (D-OH) sent letters to the CEOs of Visa, Mastercard and Stripe, warning about the potential risks Libra poses on “consumers, regulated financial institutions, and the global financial system.”
The letters state that Facebook has not sufficiently addressed how they will prevent Libra from being used for terrorist financing and other criminal activities. This is particularly concerning since Libra will receive 50% of its backing from the U.S. dollar. The senators also cite the recent privacy issues Facebook has faced to showcase weaknesses in the platform’s risk management systems.
Finally, the senators say that continual involvement with the Libra Association could lead to additional scrutiny from regulators, “not only on Libra-related activities, but on all payment activities.” This was one theory as to why PayPal withdrew from the Libra Association last week, though the company never specified a reason. Instead, PayPal simply said they want to “focus on advancing our existing mission and business priorities.” Dante Disparte, head of policy and communications for the Libra Association, replied, “We’re better off knowing about this lack of commitment now, rather than later.”
According to The Wall Street Journal, policy executives from the Libra Association have been summoned to meet in Washington D.C. today. The topic of the meeting is unknown, but on October 14, they are set to meet in Geneva to appoint a board of directors.