October has not been a great month for Facebook’s cryptocurrency aspirations. First, we heard about PayPal dropping out and declining to be a part of Facebook’s blockchain endeavor. Then eBay, Visa, Mastercard, and Stripe followed suit.
One of the reasons for the domino effect of departures was government pressure. Specifically, a couple of US Senators urged these payment processing companies to cut ties with Facebook’s Libra. Senator Sherrod Brown of Ohio and Senator Brian Schatz of Hawaii sent a letter to the payment processing companies involved with Facebook’s cryptocurrency project, Libra.
The Senators warn in the letter that Facebook has struggled with handling privacy issues and that Libra could pose even bigger problems for the Social Media company. They even expressed concern that Libra could wind up funding serious crimes such as arms dealing or human trafficking.
“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 pair of Senators wrote.
Many notable figures in the cryptocurrency industry had negative reactions to the news of the letter. Gabor Gurbacs called for governing bodies in the United States to step up and allow Americans to be innovators in the blockchain space.
The blockchain expert tweeted a picture of the letter that was addressed to Stripe CEO Patrick Collison and signed by Senators Brown and Schatz while commenting on the blockage that they’re causing.
> This is the type of letter executives at @stripe, @Mastercard and @visa (former @Libra_ members) have received.
> Many executives may have chosen not to experiment and innovate in order to avoid regulatory pressure!Sad!
> America can do better!
> Source: https://t.co/M36bkEKJU9 pic.twitter.com/kF3AXf9Xvd
— Gabor Gurbacs (@gaborgurbacs) October 12, 2019
The companies involved have declined to make comments, but it is clear that the pressure from the US government is impacting the development of Libra.