MasterCard, Visa and Stripe must reconsider involvement with Facebook’s Libra: Senators caution

A couple of Senate Democrats in the United Stated have cautioned three of the leading payment processing firms to reconsider their involvement with Facebook’s proposed Libra digital currency.

Senator Sherrod Brown of Ohio and Senator Brian Schatz of Hawaii in a letter addressed to Mastercard Inc., Visa Inc., and Stripe Inc. highlighted the risks associated with Libra. The senators also cited recent reports on the difficulties some of the potential members of the Libra Association go through while seeking access to the organization’s management and related risks.

“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 two senators said in statement regarding the letter.

The lawmakers told the payment companies to understand the above risks and how they will deal with them before committing to Libra.

“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,” the senators wrote in the letter.

At the moment, the Libra Association has 27 members after PayPal decided to quit on October 4. A recent report had indicated that other members were getting cold feet about being members of the association.