Facebooks Libra project unravels further as US lawmakers urge Visa and Mastercard to quit – Business Insider
Two Senate Democrats have reportedly urged Visa, Mastercard and Stripe to reconsider their involvement with Facebook’s Libra cryptocurrency project.
According to Bloomberg, Senator Sherrod Brown of Ohio and Senator Brian Schatz of Hawaii wrote to the 3 firms warning that their involvement poses risk to the global financial system and to the firms themselves.
On Tuesday, PayPal became the first company to leave the Libra Association, the group of companies who hope to roll out the cryptocurrency by June 2020.
Facebook, Visa, Stripe, Mastercard and the Libra Association did not immediately respond to Business Insider’s request for comment.
Facebook’s Libra cryptocurrency project is beginning to unravel.
First Bloomberg reported that Mastercard, Visa and Stripe are being urged to reconsider their involvement with the project. Then The Telegraph reported that Facebook Libra group head Simon Morris had left in August, confirmed by Morris’ LinkedIn profile.
Libra is intended to be a new digital currency that would work with online purchases and digital money transfers. It was conceived by Facebook, but the idea is that Libra will be led by a group of different firms via the non-profit Libra Association. The goal is a 2020 rollout.
Visa, Mastercard, and Stripe are three of the 27 Libra Association members. Two Senate Democrats – Senator Sherrod Brown of Ohio and Senator Brian Schatz of Hawaii – have written a letter to the three payment processing firms, reportedly warning that Libra poses a risk to the global financial system.
The senators’ letter appears to capitalize on a Wall Street Journal report which said both Visa and Mastercard were reconsidering their involvement with Libra. That report also said some Libra Association members were concerned about getting hold of details about how the organisation would be run and the risks of keeping the currency secure.
The senators’ letter reads, according to Bloomberg: “We urge you to carefully consider how your companies will manage these risks before proceeding, given that Facebook has not yet demonstrated to Congress, financial regulators — and perhaps not even to your companies — that it is taking these risks seriously.”
Facebook itself has hit back at reports that it’s failing to share detailed information with partners.
Still, it’s yet another roadblock in Libra’s short history.