In June, the social media giant unveiled its plan for Libra, announcing its intent to roll out the international digital currency next year. The company said the fiat backed cryptocurrency would be controlled by the Libra Association, a non profit made up of international companies. That group of companies initially started with 28 companies, and is now down to 23 as companies start to face regulatory obstacles. This prompted David Marcus, lead head spokesmen to gain respect for Bitcoin and what it went through as a new crypto-project.
Libra has been already facing extreme regulatory scrutiny all over the world, and now the payment firms have announced their departure.
US Govt. Forcing Companies & CEOs to Dump Libra
However, the decision to quit Libra by the companies seems to be forced by the US government. A letter by the US Senate to Patrick Collison, co-founder and CEO of Stripe has surfaced online where the Senate is talking about its “deep concerns” — risks to consumers, regulated financial institutions, and the global financial system — about Libra and Libra Association.
“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 to your companies—that it is taking these risks seriously,”
the letter reads.
Land of the Free https://t.co/uIOio7H7qt
— Erik Voorhees (@ErikVoorhees) October 12, 2019
It further states that Facebook fails to provide a clear plan for how it will prevent Libra from facilitating criminal terrorist financing, destabilizing the global financial system and interfering with the monetary policy and is deflecting addressing on these risks to the members of the Association.
“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. These risks are not hypothetical.”
Or Get Ready to Face its Wrath
The US Senate further pointed out how Facebook Messenger contributed to Child sexual abuse photos and videos and warned about the implications of combining encrypted messaging with embedded anonymous global payments via Libra.
“Your companies should be extremely cautious about moving ahead with a project that will foreseeably fuel the growth in global criminal activity.”
The government is outrightly threatening these companies to dump Libra or to
“expect a high level of scrutiny from regulators not only on Libra- related payment activities, but on all payment activities.”
In response to this Gabor Gurback, digital asset strategist/director at VanEck shared his disappointment on Twitter saying,
“Many executives may have chosen not to experiment and innovate in order to avoid regulatory pressure! Sad! America can do better!”
He also had this to add a few days back about the departures of Visa and Mastercard:
Every company that is leaving #Libra is likely, in some ways, forced to do that. It’s unfortunate and I am sorry that capital markets aren’t free. > Now you have a first hand understanding why censorship-resistance is important! > Welcome to #Bitcoin!
And finally, Alan Silbert, former Capital One Vice President wrote:
“No matter what your position is on Libra, it is unacceptable for the government to be sending a letter like this to private companies,”
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