Two U.S. lawmakers – Senator Sherrod Brown of Ohio and Senator Brian Schatz of Hawaii – have asked three payments giants Visa, Mastercard and Stripe to reconsider their partnerships with Facebook-led proposed stablecoin project, Libra.
In three letters sent to the companies’ CEOs, Brown and Schatz said that the Libra project poses risks to consumers, financial institutions, global financial system, as well as the three companies’ broader payments business.
“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,” said the senators.
They added that Facebook has not provided a clear plan for how it will prevent Libra from facilitating criminal activities and terrorist financing, among other risks.
“Facebook is currently struggling to tackle massive issues, such as privacy violations, disinformation, election interference, discrimination, and fraud, and it has not demonstrated an ability to bring those failures under control,” Brown and Schatz said, adding:
“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.”
Executives at Visa, Mastercard and Stripe are themselves reportedly concerned with Facebook’s handling of privacy issues and are hesitant to officially sign on to the Libra project.
Just last week, another payments giant PayPal officially dropped out of the project, saying that it remains “supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future.”