On Friday
Bloomberg reported that five more firms have withdrawn from
Facebook’s Libra stablecoin project. The digital currency abandonments include Mastercard, Visa, eBay, Stripe and Argentinian online payments company Mercado Pago. The floodgates were started by
Paypal’s withdrawal announcement a week earlier.
Before the Paypal revelation, it was rumored that the firm was concerned about increased regulatory scrutiny into its core payments business. Likewise, four out of five of the latest withdrawals are payments firms.
That concern was reinforced by last
Tuesday’s letter from U.S. Senators Brian Schatz and Sherrod Brown. They
wrote to Mastercard, Visa and Stripe and urged them to withdraw. The letters warn that “weaknesses in Facebook’s risk management systems will become weaknesses in your systems that you may not be able to effectively mitigate.” It alleges that Facebook “is shifting the risks and the need to design new compliance regimes on to regulated members of the Libra Association like your companies.”
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