Visa, Mastercard, and more reconsider backing Facebooks Libra

Thursday 3 October 2019 11:37 CET | News

Visa, Mastercard, and other financial partners have reconsidered their involvement to help build and maintain Facebook’s Libra payments network.

The decision follows a backlash from US and European government officials. Executives of some of Libra’s backers have declined Facebook’s requests to publicly support the project, and the reason is that they are trying to be wary in regards to attracting regulatory scrutiny. As per a memo reviewed by The Wall Street Journal, on 14 October, representatives from the companies are slated to meet in Geneva in order to review a charter for the Libra Association and appoint a board of directors.

As US regulators leaned on Libra’s backers, the Treasury Department sent letters to companies such as Visa, Mastercard, PayPal Holdings, and Stripe, asking for a complete overview of their money laundering compliance programs and how Libra will fit into them.

On the other hand, Libra Association members have been pressing Facebook for more information, namely how illegal activities including money laundering and terrorist financing would be kept off Libra. However, it is unclear how many of the initial Libra Association members ultimately will commit to the network. So far, association members have signed nonbinding letters of intent, but they haven’t yet handed over the USD 10 million that Facebook requested from each member to fund the creation of the digital coin and build out the payments network.

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Keywords: Visa, MasterCard, Facebook, Libra, money laundering, illegal activities, regulatory scrutiny, cryptocurrency, digital assets, terrorist financing, regulations, government
Countries: World