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Visa, Mastercard receive request to reconsider participation in Libra as others discuss ‘fork’

Namrata Shukla

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Source: Pixabay

Facebook’s Libra has garnered a lot of attention from almost every corner of the world, mostly from regulators who are freaking out about Libra’s possibilities and its effects on government monetary policies. However, regulatory concerns about Libra didn’t end with the Congressional hearings. In fact, two Democratic Senators have penned down a letter to three major payment processors, asking them to rethink their stance on Libra.

These concerns already have their first victim in PayPal, after it excused itself from the project, despite being one of the first 28 companies to back the Libra project. Following the same, there have been speculations about other projects being iffy too.

In a letter drafted by Senator Sherrod Brown of Ohio and Senator Brian Schatz of Hawaii to Visa Inc., Mastercard Inc., and Stripe.Inc., the senators claimed that Libra posed a risk to the global financial system and the payment companies’ business. The Senators’ provided the companies with media reports of difficulty faced by some Libra Association members, in obtaining details of the organizations’ management and risks.

Senator Brown and Schatz said,

“Congress, financial regulators, and potential Libra Association member companies have struggled to get sufficient details from Facebook about risks that Libra may pose, including facilitating criminal and terrorist financing, destabilizing the global financial system, interfering with monetary policy, or exposing consumers to risks currently limited to accredited investors.”

The duo went ahead to urge the companies to consider the risks and its management, especially when “Facebooks has not yet demonstrated to Congress, financial regulators- and perhaps not even to your companies.” The duo asked the companies to be concerned as they might not be able to effectively mitigate any weaknesses in the social media site’s risk management systems.

However, despite the skepticism, there are many appreciators of the project. One of them is Lucas Geiger, Co-founder of Wireline and now, founder of the ‘OpenLibra’ project. According to reports, the Libra project that has not even launched is now being “forked” to a new version that claims to be “an open platform for financial inclusion, not run by Facebook.” Geiger already has a website up and running and has backing from members of the Ethereum Foundation, Wirelines, Cosmos, and Radicle/Oscoin, among 35 others.

Namrata is a full-time journalist at AMBCrypto covering the US and Indian market. A graduate in Mass communication, while majoring in Journalism, she writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.