WSJ: Libra May Lose Key Partners over Regulatory Scrutiny

The Fed and U.S. Treasury Department are Raising Questions

The Facebook Libra cryptocurrency project could lose key partners, according to the Wall Street Journal. However, the Journal’s report did generate a response from David Marcus and Facebook. Here’s what happened on Tuesday.

The Journal reported that the combination of regulatory uncertainty and opposition from central banks and politicians may drive companies like Visa and Mastercard away. Facebook has continued to face criticism over its data privacy rules.

Now, with 2.4 billion users around the globe, Facebook faces even greater scrutiny over its cryptocurrency projects.

Criticism over the Facebook Libra Cryptocurrency

Recently, Federal Reserve Chair Jerome Powell said he had “serious concerns” about the Libra cryptocurrency. But that’s just the tip of the iceberg according to the Wall Street Journal report. The newspaper reports that the U.S. Treasury Department has already contacted payment processors like Mastercard, Visa, and Paypal. The agency wants a complete overview of their money-laundering compliance programs and how Libra will fit into them.”

These types of demands are enough to form a wave of nervousness about their participation in the project. In fact, the Journal reports that several companies have declined to support Libra publicly, despite Facebook’s requests.

The story broke a day before Libra Association members visit Washington D.C. We will find out on Thursday if any splintering emerges due to the recent scrutiny.

David Marcus Speaks Out

Meanwhile, on Wednesday afternoon, David Marcus, head of the Facebook Libra cryptocurrency project, responded to the Journal’s report.

“For Libra to succeed it needs committed members,” he said. “[And] while I have no knowledge of specific organizations plans to not step up, commitment to the mission is more important than anything else.”

Finally, Marcus went on to suggest that the report about the partners may have been overexaggerated.

“The tone of some of this reporting suggests angst, etc… I can tell you that we’re very calmly, and confidently working through the legitimate concerns that Libra has raised by bringing conversations about the value of digital currencies to the forefront,” he said.

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January 29, 2020

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