Two Senators in the United States want Visa Inc., Mastercard Inc., and Stripe Inc., to back out of the Facebook’s Libra cryptocurrency project, just like PayPal did.
According to a Bloomberg’s post on Wednesday, Senator Sherrod Brown of Ohio and Senator Brian Schatz of Hawaii issued a letter, warning the payment processing companies of possible risk associated with Libra.
In the letter, the senators urged the three companies to reconsider their involvement with the Facebook project, saying that Libra poses risks that can affect the global financial systems and their broader payments business.
The senators cited reports on the difficulty some of the project members faced while trying to obtain details on the organization’s management and risks, with concerns to Libra interfering with monetary policy, destabilizing the global financial system, and exposing users to risks currently limited to accredited investors.
“Congress, financial regulators, and potential Libra Association member companies have struggled to get sufficient details from Facebook about risks that Libra may pose […]” the lawmakers wrote.
The senators further noted that Facebook is already battling to address other issues, like disinformation, discrimination, privacy violations, election interference, and fraud. It has made no significant progress to bring these failures under control.
“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,” they added.
Visa, MasterCard, and Stripe, per the lawmakers, should be more concerned about the fact that any weakness in Facebook’s risk management systems will result in an uncontrollable weakness in their systems too.
While we look forward to the companies’ reactions on the matter, PayPal Inc., already left the organization on October 4. PayPal co-founder, Max Levchin sometime ago, said: “Cryptocurrency is not a great commodity anymore.”
Meanwhile, Tim Cook of Apple Inc., said during an interview that his company has no plans of launching a cryptocurrency, as creating money (whether fiat or crypto) is the responsibility of the Government and not private enterprises.