Amid the exit of PayPal from the Libra Association, the focus is now on three other major partners of the project – Visa, Mastercard, and Stripe.
Two Senate Democrats – Senator Sherrod Brown of Ohio and Senator Brian Schatz of Hawaii – have urged the three payment giants to reconsider their association with Facebook’s ambitious crypto project.
In three copies of the letter sent to the CEOs of the companies on Tuesday, the two senators warned against the risks of digital currencies to consumers, financial institutions, and global financial stability. They also pointed out the potential business risks the three companies might face with the launch of Libra.
“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,” the letter stated.
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Can the association hold its original members?
Following the announcement of Libra in June, Facebook signed non-binding agreements with 28 payments and tech companies, making them members of the Libra Association. However, only 27 are remaining, as PayPal recently exited the project.
Media reports also revealed that Visa, Mastercard, and Stripe are considering to pull their support for the project amid concerns of getting negative regulatory attention.
“Facebook is currently struggling to tackle massive issues, such as privacy violations, disinformation, election interference, discrimination, and fraud, and it has not demonstrated an ability to bring those failures under control,” the senators added.
“You should be concerned that any weaknesses in Facebook’s risk management systems will become weaknesses in your systems that you may not be able to effectively mitigate.”
Meanwhile, in Europe, lawmakers are concerned with the threat of Libra to monetary sovereignty. The EU’s finance commissioner recently vowed to regulate digital currencies, including Libra, in the union.