By Facebook cryptocurrency, Libra, has had it rough this October. Various partners withdrew their support within the month. First, PayPal announced its withdrawal. eBay, Visa, MasterCard, and Stripe then followed in the decision to no longer be part of Facebook’s cryptocurrency aspirations.
Government Pressure
The leading cause of the withdrawal by the said startups is said to be government pressure. Two US senators advised the money processing firms with ties to Libra to cut those ties. This recommendation was sent to the money processing firms via a letter from Senator Sherrod Brown, Ohio and Senator Brian Schatz, Hawaii.
The letter sent by the two senators highlight the privacy issues that Facebook had struggle dealing with in the past. They stated that Libra would result in more problems for Facebook. Another of the senators’ concerns highlighted in the letter is the worry that Libra could end up funding crimes, such as human trafficking and gun dealings.
The senators urged the companies to consider the management of the risks involved given that Facebook had not demonstrated that they were taking the threats seriously.
Reaction to the Letter
A picture of the letter sent to the Stripe CEO was posted on Twitter by one of the blockchain experts. A lot of adverse reaction has been observed from notable figures in the cryptocurrency industry regarding the letter. Lots of comments stating how much blockage was resulting from this letter have been posted on Twitter following the picture of the message.
Gabor Gurbacs stated that even though most of the executives had chosen to stand in the sidelines and not experiment with blockchain technology to avoid regulatory issues, it was time to allow Americans to experiment and innovate in the blockchain technology.
Although the companies involved in this mess have declined to make comments, it is clear that pressure from the US government has an impact on the development of Facebook’s Libra.
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