Following the exit of PayPal from the Libra Association last week, it appears as if two US Senators are trying to scare off a few more members with letters penned to the heads of the remaining major payment companies.
Visa, Mastercard, and Stripe CEOs have all received the same letter from Sens. Brian Schatz (D-HI) and Sherrod Brown (D-OH), who have warned them of the enormous risks around the launch and expansion of the Libra cryptocurrency.
The two Senators, in their letters, have stated that Libra remains a risk to consumers, regulated financial institutions, and the global financial system as Facebook has failed to answer questions about how these risks will be managed.
The concerns raised by the Senators do not wholly focus around Libra, instead it expands to attacking the company behind this project, Facebook. The two Senators appear to be of the belief that Facebook is unable to run its own core business without controversy surrounding privacy hacks, disinformation, election interference, and even fraud, so they cannot see how it will be a success with Libra.
The letters begin by raising the concerns that the lawmakers, as well as many different global regulators, have surrounding Libra and its intended uses. Finance ministers from France and Germany have made their thoughts known, as has Apple’s CEO Tim Cook; those against the rise of Libra are far outweighing those in support, and these letters look to be an attempt to sway the remaining members.
The two Senators cite that Libra members have also been left in the dark by Facebook in relation to how regulatory concerns will be handled and dealt with; the use of Libra for funding terrorism and criminal activities is one such misuse that is quoted.
More so, the Senators state that these inherent risks are being reflected on the Libra Members, which of course, will be hugely damaging to their reputation. Speaking of damaging reputations, the lawmakers also take big swipes at Facebook, calling its role as a facilitator online child sex abuse to the fore.
The message from the Senators is a harsh one, and probably a little over the top, especially in regard to the attack on Facebook. However, the overall effect of it is quite clear. There is more than enough pushback to suggest that Libra is a sinking ship and may not ever get off the ground. Therefore, to be associated with it may be a waste of time, at the least, and at the worst, a reputation destroyer.