There is a high possibility that companies like PayPal, Mastercard, and Visa face the risk of more stringent regulations since they have been supporting the new digital currency of Facebook, called Libra.
James Faucette, an analyst from Morgan Stanley, has stated that all these three businesses might face a “heavy burden” with the increasing regulatory scrutiny in the crypto field.
According to Faucette, Visa and Mastercard might have to face greater political as well as regulatory risk as compared to technology-related risks. With the plunge in transaction cost, it will not be an easy task to disturb their positions as industry leaders. However, regulatory or political opposition can dislodge their jobs according to Faucette.
What the Senate and the House decide on the new digital coin venture of Facebook is definitely important for the social media giant. The hearings for Facebook as well as its backers like Stripe, PayPal, Mastercard, and Visa are supposed to take place in mid-July this year. Cowen’s Jaret Seiberg mentioned that these hearings are highly crucial for Facebook.
Seiberg also feels that it will not be an easy task as the hearings may not be done amicably with a majority of lawmakers skeptical of this move. Also, any lawmakers who usually support digital currencies can hesitate in backing the entry of Facebook in the crypto space.
Facebook gets support for its crypto initiatives
The social media giant has received support from over more than 12 organizations, including prominent players like Paypal, Mastercard, Uber Technologies, and Visa, that have backed its new digital currency. The Wall Street Journal shared the news in June this year.
All these businesses will invest about 10 million USD in a consortium, which will govern this digital currency. The aim is to fund the formation of the new digital coin, the same report mentioned.
Andrej Burcev got into Crypto while completing his Bachelor of Science at Kingston University in London. Andrej now works as Senior Software Engineer. He is currently collaborating and writing articles for TheDailyCoins with his focus in innovative technology and its cultural and social influence.