14 Oct 2019
The anticipated launch of Libra, the Facebook’s proprietary cryptocurrency, which can be characterized as a stablecoin, is more than a year away, yet the global informational space is constantly buzzing with every bit of news related to the so-called Zuck Buck, a slightly sardonic nickname of the future digital coin that made the US lawmakers bare their teeth.
This time around, two United States Senators went as far as making an official plea to three companies: Visa, Mastercard, and Stripe, which had already vested their interest in the Libra Foundation, in the form of a letter, asking them to pull out of the project willingly. In this letter, the officials have resorted to making covert threats to the corporations, implying that they would not be capable of handling the regulatory scrutiny and mitigating other risks associated with the infamous cryptocurrency.
Therefore, Senators suggested that these companies should reconsider their further involvement with Libra Foundation before the signing of a formal charter that is due to take place on October 14.
Brian Schatz, a Democrat Senator that represents Hawaii, and Sherrod Brown, another Democrat elected in Ohio, have sent the “warning” letters to Patrick Collison, the co-founder and CEO of Stripe, Alfred Kelly, the chief executive at Visa, and Ajaypal Singh, the President and CEO of Mastercard. The politicians have formulated their concerns in relation to the nature and the future scope of application of Libra, as well as the negligent attitude displayed by Facebook towards the security of personal data and the capability of preventing other informational manipulations, for instance, meddling in the last US elections.
Senators claim that Facebook has so far failed to properly address the numerous privacy violations, data breaches, and other instances of fraudulent behavior, of which the social media giant had been accused over the course of the last two years alone.
Moreover, they accused Facebook of being a haven for sexual predators, claiming that the bulk of abuse reports were attributed to that company. The politicians drew a gloomy picture of Facebook becoming a major platform for criminal activity after they will have introduced the encrypted messaging in combination with the anonymous cross-border payments by a means of Libra.
In the closing parts of the letter, Schatz and Brown even went as far as intimidate the recipients by promising to expose them to a “high level of scrutiny” from the US financial regulators, should they proceed with their cooperation with Facebook on the cryptocurrency development.
Visa, Mastercard, and Stripe are not the only globally renowned companies that got themselves in the crossfire between Facebook and the regulators. In fact, PayPal, a universally popular payment solution, had already declared the intention to discontinue cooperation with the Libra Association, or other cryptocurrency-related endeavors initiated by Facebook. The reason for that being that PayPal wants to devote all their resources to further develop the existing projects instead of getting involved in a controversial venture that might hurt both their reputation and the relationships with the governments of Western countries. Facebook replied that they acknowledge PayPal’s right to withdraw from the project and hope to retain their strategic partnership.
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