In a matter of one day Mastercard, Visa, Stripe and eBay all quit Facebook’s cryptocurrency association Libra. This follows PayPal’s exit about a week ago and the general increased levels of scrutiny that Libra has received from regulators since its inception this summer.
A letter sent to the CEOs of Visa, Mastercard and Stripe earlier this week by senators Brian Schatz (D-Hawaii) and Sherrod Brown (D-Ohio) expresses deep concerns regarding the Libra association. The concerns especially emphasizes that Facebook has yet to fully flesh out how they plan to ensure that Libra will not be used as a tool to finance criminal activity and terrorist activities.
We write to share our deep concerns about Facebook’s Libra crypto-currency project and the formation of the libra associationBrian Schatz (D-Hawaii) and Sherrod Brown (D-Ohio)
Furthermore, in no uncertain terms it states that if Mastercard, Visa and Stripe were to continue to be part of the Libra association they would face increased levels of scrutiny. Not only on their activities related to Libra, but on their entire underlying business model.
If you take this on, you can expect a high level of scrutiny from regulators not only on Libra-related payment activities, but on all payment activitiesBrian Schatz (D-Hawaii) and Sherrod Brown (D-Ohio)
Comments from Visa, Mastercard and Stripe have generally been positive and supportive, and reiterated that it is just not the right moment for them to be engaged with Libra this moment, similar to reasons cited by PayPal.
Libra is on the face of it taking the news in stride with Co-creator David Marcus remaining largely positive on Twitter, despite the substantial mounting pressure.