Mastercard CEO explained the reasons why he left the Libra Facebook project

Photo: World Bank Photo Collection/ CC BY-NC-ND 2.0

Ajay Banga, CEO of Mastercard, gave the reasons why his company decided to take a step to the side of the Association Libra led by Facebook, he explained Financial Times.

Banga said he did not understand how profits would be generated from the project and that the creation of the Calibra virtual wallet was not consistent with the proposal to promote a global digital currency.

In this regard, Banga mentioned that the Libra project "went from this altruistic idea (to create a global currency) to create its own portfolio and told me 'this does not sound good'".

Likewise, it was categorical when referring to the anti-laundering measures that would be adopted for the development of the digital currency project with global reach. He noted that, while the members undertook to do nothing that was contrary to the applicable standards, this commitment was not materialized in a formal document.

Additionally, a topic of great relevance for the Mastercard head, and that would have been important for the exit of this company, would consist of the handling of the personal data of the users. Thus, previous Facebook scandals related to the manipulation of user data by Cambridge Analytica would not have been forgotten by the payment methods company.

It should be noted that, despite not being interested in the Libra project, the CEO of Mastercard would be in favor of creating a global digital currency.

«The economic cost of building isolated [payment] systems in a world where citizens travel worldwide is really stupid, and where crime travels worldwide is even more stupid, and where technology is completely global it is even three times more stupid, ”said Ajay Banga.

According to Banga, local networks to make payments and transfers fragment the transaction data necessary to perform the analytical work, which is essential to be able to track the crime, making this work more difficult at a time when money laundering and Terrorist financing crosses borders.

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Adolfo Morán
Adolfo is Founder and Executive Director of Lawgic Tec, a nonprofit association dedicated to research on issues of law and new technologies. General Editor of The Crypto Legal web platform and Legal Consultant in the Financial Regulation and FinTech area of ​​EY Law. He specializes in Blockchain, Smart contracts and Fintech. Email: contacto@lawgictec.org

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