Two Senate Democrats have reportedly urged payment processors Visa, Mastercard, and Stripe to drop out of their partnership with Facebook’s new Libra cryptocurrency.
Business Insider reports that Sen. Sherrod Brown (D-OH) and Sen. Brian Schatz (D-HI), have written a letter asking payment processors Mastercard, Visa, and Stripe to reconsider their involvement with Facebook’s new digital cryptocurrency Libra. The Libra digital currency was started by Facebook and is designed to be used for online purchases and digital money transfers. Libra will be led by a group of different firms via the non-profit group the Libra Association and is planned to be launched in 2020.
Visa, Mastercard, and Stripe are three of the 27 firms that comprise the Libra Association. The letter sent by the senators to the payment processors focused on a report from the Wall Street Journal which claimed that Visa and Mastercard were reconsidering their involvement with the project. The letter states:
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.
Although the project has yet to fully launch and was only announced in June, it’s already lost a major firm this week with PayPal announcing its departure from the Libra association. PayPal did state that it “remains supportive of Libra’s aspirations,” but would no longer be involved in the project.
President Trump has previously criticized the virtual currency stating that it will have “little standing or dependability.”
….Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National…
— Donald J. Trump (@realDonaldTrump) July 12, 2019
The European Union also began an official investigation into Libra over competition concerns in August while French finance minister Bruno le Maire said that France “cannot authorize” Libra’s development in Europe over consumer risk concerns.