What If Cryptos Succeed Only After The US Has Locked Itself Out?

Recent developments in cryptocurrency have brought new currencies and more uncertainty about them and some of the underlying investments in this brave new world.

Anthony Pompliano, a founder and partner at Morgan Creek Digital, tackles these issues and more relating to the cryptocurrency universe in his blog, Off the Chain.

On Oct. 8, two Senators wrote to the CEOs of the credit card giants, Mastercard (MA) and Visa (V), as well as to the CEO of a prominent payment processing company, Stripe, to “share [their] deep concerns” about cryptocurrencies, and especially about Facebook’s (FB) recent venture into that terrain with its Libra (LIBRA).

What the Senators Said

The Senators, Brian Schatz (D – Hi) and Sherrod Brown (D – Ohio) said that the three companies might face serious legal jeopardy arising from their participation in the program. From less august and impeachable persons, the letter might even have been considered threatening. Schatz and Brown write that Facebook has not provided “a clear plan for how it will prevent Libra from facilitating criminal and terrorist financing” and other very bad things, and they caution that their companies would be in the line of fire, since “Facebook (FB) deflects the responsibility of addressing these risks onto potential Libra Association members, such as your companies…any weaknesses in Facebook’s risk management systems will become weaknesses in your systems that you may not be able to effectively mitigate.”

The letter, received by Patrick Collison for Stripe, Ajaypal Singh Banga for Mastercard, and Alfred F. Kelly Jr. for Visa, had the desired effect. All three companies had backed off of participation in the Libra Association before its first planned meeting on Oct. 14.

Even without having received such a direct communication, eBay (EBAY), Mercado Page, and PayPal (PYPL) have also dropped out of the Libra Association.

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