There’s been no shortage of official opposition to Facebook and dozens of corporate partners’ plans to launch a cryptocurrency powered global payment network, Libra. A short list of the wary might include the heads of the U.S. Federal Reserve and Treasury Department, the House and Senate banking committees, EU antitrust officials, Indian and Chinese finance officials, and the French government, which vowed to stop it in its tracks across Europe.
It’s almost like it’s a bad idea to trust Facebook with this! Corporate members of the so-called “crypto mafia” supporting the project were already reported to be getting antsy about regulators back in August, and judging by a Tuesday report in the Wall Street Journal, the situation is now approaching something resembling panic mode.
Sources told the Journal that Visa, Mastercard, and “other financial partners that signed on to help build and maintain the Libra payments network” are now reconsidering whether they should remain involved. Those sources said that executives at some companies have even rebuffed Facebook’s pleas for them to get on the bullhorn in support, the paper wrote, even as the clock is ticking towards an Oct. 14 meeting in Geneva to review a charter and appoint directors:
Wary of attracting regulatory scrutiny, executives of some of Libra’s backers have declined Facebook’s requests to publicly support the project, the people said.
Their reluctance has Facebook scrambling to keep Libra on track. Policy executives from Libra’s more than two dozen backers—a group called the Libra Association—have been summoned to a meeting in Washington, D.C., on Thursday, according to people familiar with the matter.
According to the prior reporting from August, some of the partners were wary that moving forward with Libra could attract broader regulatory scrutiny of their activities. And lo and behold, sources told the Journal that the Department of Justice has requested Visa, Mastercard, PayPal, and Stripe provide a “complete overview of their money-laundering compliance programs and how Libra will fit into them.”
Facebook’s point man on Libra development, David Marcus of its subsidiary Calibra, took to Twitter on Tuesday evening to rebut one Journal source’s claim that some partners had not received detailed information about how the Libra Association would conform to “anti-money-laundering laws and preventing terrorism financing.”
None of the 28 groups involved have committed to the project beyond nonbinding letters. According to the Journal, neither have they forked over the $10 million that Facebook has asked each member to contribute towards development.
Facebook has been facing a lot of heat lately beyond Libra, including reports that the Department of Justice has opened an antitrust investigation (it’s already facing similar investigations by the Federal Trade Commission and multiple states). Rivals, including Snap, have reportedly begun sharing dossiers of alleged anticompetitive behavior from the social media giant with the feds.
In recently leaked audio of internal meetings, CEO Mark Zuckerberg claimed that Facebook was taking a “more consultative” than speed-focused approach to Libra in order to avoid giving the appearance it wants to move fast and break things with the world financial system. But the sheer scale of what Facebook hopes to pull off is aggressive in and of itself and comes at a piss-poor time for anyone who might think twice about getting pulled into their mess.[Wall Street Journal]