It’s well documented that since the announcement of Libra a few months ago, very few political leaders have come out in support of the idea. If anything most political leaders are pretty apprehensive about leaving Facebook to go ahead with plans to form a global cryptocurrency unchecked.
These political uneasiness has spread to partners of Facebook in the Libra project who are now more cautious about the project than they were before. It’s believed that Visa, Mastercard and other backers of the projects have declined Facebook’s requests to publicly support the project in fear of regulatory scrutiny.
US regulators are said to have sent letters to some of the project’s backers asking for a complete overview of their money-laundering compliance programs and how Libra will be compatible with them. Maybe this is where the cold feet come from.
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What did you expect?
This is an interesting and pretty surprising turn off events. If the backers did not expect regulatory backlash when partnering with Facebook – a company that has become synonymous with privacy breaches over the last year then that’s a startling lack of foresight on their part.
Facebook has been rightfully under the microscope concerning issues to do with privacy and them launching a cryptocurrency would obviously concern a significant number of political leaders considering the global reach of Facebook. If their partners are surprised by any of this it begs the question, what reaction did they expect?
It’s also worth noting that it’s unfair for Facebook to ask any of these potential backers to come out and publicly endorse Libra when the partners only signed a letter of intent. None of the partners has paid the $10 million joining fee so to come out and publicly support the project without having officialized the partnership would be premature.