In the wake of multiple Libra Association founding member withdrawals, U.S. Senator Mike Rounds (R-SD) sent a letter to founding member Anchorage praising the company for its role in the project.
Rounds' letter opposes one sent earlier this month by his Congressional colleagues U.S. Senator Sherrod Brown (D-OH) and U.S. Senator Brian Schatz (D-HI). The senators urged Visa, Mastercard, and Stripe to drop their affiliation. The companies pulled out a few days after the letter.
"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," Rounds wrote to Anchorage.
Rounds expressed concern that the U.S. is falling behind in the digital economy. He pointed to the rate of digital wallet use as much lower in the U.S. in comparison to Africa, and the U.S. mobile payment transaction volumes as paltry compared to China.
Additionally, he called the negative reaction to Libra "puzzling" due to the antiquity of securities laws. The Securities Act of 1933 is inadequate since it was written more than half a century prior to the digital age. Currently, there remains no clear legal way to ascertain whether a cryptocurrency is a security, according to Rounds.
"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," he wrote
The concern surrounding Libra could be ameliorated through existing legislative proposals, according to Rounds. This includes expanding anti-money laundering and other crime-reduction measures.
Rounds closed his letter by urging Anchorage to "persevere" in its role in the Libra Association.
Rounds' state of South Dakota has been a leader in crypto legislation efforts. BitGo has resided in the state since 2018. Anchorage announced its charter to set up a "smart" crypto custody shop in the state this past July. South Dakota is also home to the U.S.' first "Trust Task Force."
Despite the ongoing discussion, Mercado Pago, Visa, eBay, Stripe, and Mastercard made a collective exit last week. The exodus followed PayPal's departure the week prior.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.