US Senate pressure Stripe, Visa and Mastercard to leave Libra
US Senators have continued their attack on the Libra project with letters being sent last week to Stripe, Visa and Mastercard threatening a "high level of scrutiny" on "all [their] payment activities" if they remain Libra members.
Despite recent testimony from David Marcus of Calibra, during which he stated that Libra would comply with all US regulations and not launch in the US until US lawmakers’ concerns have been answered, the letters, sent by Senator Brian Schatz and Sherrod Brown (who memorably said in the recent Libra hearings that Facebook had "burned down the house over and over") in identical terms to Stripe, Visa and Mastercard, claims:
key questions remain unanswered about the risks the project poses to consumers, regulated financial institutions, and the global financial system.
The letter then asserts that Facebook:
has not provided a clear plan for how it will prevent Libra from facilitating criminal and terrorist financing, destabilizing the global financial system, interfering with monetary policy or exposing consumers to risks currently limited to accredited investors
After blasting Facebook's many documented failings, including the use of Facebook Messenger to disseminate child pornography, a pretty scandalous inclusion in such a letter, the pressure is ramped up with the Senators saying:
Your companies should be extremely cautious about moving ahead with a project that will foreseeably fuel the growth in global criminal activity.
Most chilling of all is the closing threat:
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 activities.
The response from Stripe, Visa and Mastercard was to join eBay and Paypal in withdrawing from the Libra project. It's unlikely that departure was a co-incidence. The departure of these businesses from the Association is of course, counter to the goal which the US Senate presumably seeks, being a compliant payment system emerging from the Libra project.