US Treasury Secretary: Visa, PayPal, etc. withdraw from Libra because they have not yet reached regulatory standards and are worried about government action

After the five major supporters of Facebook's Libra cryptocurrency announced their withdrawal from the project, US Treasury Secretary Steven Mnuchin said he believes these companies may be concerned that the government will take action.


Mnuchin said in an interview with CNBC's "Squawk Box" on Monday that he has met with Libra representatives many times and " very clear…if they don't meet… our money laundering standards and we are in the [Financial Crime Enforcement Network] The standards, we will take enforcement action against them. And I think they realize that they are not ready yet, and have not yet reached the standard. I think some partners have raised concerns and opt out until they meet these standards. "

Last Friday, five Libra supporters followed PayPal's footsteps and withdrew from the Libra Association, a non-profit organization that manages the new cryptocurrency that Facebook envisions. Visa, Mastercard, Stripe, Mercado Pago and eBay all announced that they no longer plan to participate in the program, which initially had 28 corporate supporters. The withdrawal of the four payment companies may have caused a particularly severe blow to the project, which has been reviewed by governments around the world.

These exit decisions were issued prior to the first meeting of the Libra Association Council in Geneva on Monday. According to the Wall Street Journal, members of the Facebook cryptocurrency project Libra will review the charter and appoint a board of directors at the board meeting. Libra said this month that details will be given after a meeting of 1,500 “entities” attended, and these entities all expressed “strong interest” to participate in the project.

It is worth noting that not only US Treasury officials are paying close attention to Libra. The US House Financial Services Committee has asked Facebook CEO Mark Zuckerberg to attend a hearing on October 23, the first time he has returned to Congress for public testimony since he discussed the Cambridge analysis scandal in 2018. . After Libra project leader David Marcus testified in July, legislators still questioned.

Several lawmakers encouraged Facebook to abandon its plans until enough regulatory mechanisms were in place, but Facebook did not make a promise to waive explicitly, instead it said it would find ways to address legislators' concerns.