US Senator Finds Negative Reactions to Facebook’s Libra ‘Puzzling’

United States Senator Mike Rounds has expressed his support for Facebook’s Libra coin in a letter sent to the Anchorage Trust, a member of the nonprofit Libra Association.

United States payment systems in its infancy

On Oct. 17, Rounds wrote to Nathan McCauley, president of crypto custodian company Anchorage Trust, where he expressed his concerns that other parts of the world are “dwarfing” the United States in innovative payment technologies. 

The Senator points to the people’s Republic of China, where 80% of consumers used mobile payment systems last year, compared to only 10% in the U.S. According to the Senator, the payment industry in the U.S. is still in its infancy and it is therefore bewildering that his colleagues would react with such hostility to the creation of Facebook’s Libra stablecoin. Rounds wrote to McCauley:

"It is profoundly disappointing that my colleagues chose to address your peers in such an ominous tone, which I fear may put a chill on innovation in the long run."

Innovation in securities

The senator called the negative reactions toward the creation and launch of Libra "puzzling" considering the antiquity of the legal framework in the U.S.

Rounds claims that there is no clear legal way to decide whether a cryptocurrency is a security or not, while the only legal foundation they do have is rooted in an outdated Securities Act of 1933, adding:

"That law was written more than half a century before computers and the internet were created, more than two decades before Hawai'i was admitted to the Union, a decade before the jet engine was developed, and in a period of time in which 90 percent of rural America lacked electricity.”

Rounds concluded his letter by thanking Anchorage for its perseverance and willingness to “take risks to improve the lives of Americans and neighbors across the globe.”

Libra not in jeopardy without PayPal or Visa

Cointelegraph recently reported that Calibra’s David Marcus argued that Facebook’s cryptocurrency project is absolutely not in jeopardy after PayPal, Visa, Mastercard, Stripe, eBay, Mercado Pago and Booking quit the Libra Association. He said:

“One thing that is not well understood is that you don’t need to be a member of the Libra Association to build services and products. So if Visa and Mastercard want to issue cards for Libra wallet at a later stage, they can still do it without being members of the association.”