Congressional Committee Asks Facebook to Reconsider Cryptocurrency Plans

After months of speculation, Facebook finally announced the first details about the planned debut of Libra just a few short weeks ago. While the news was well-received in many circles and arguably helped push the price of Bitcoin north, it seems that not everyone is on board with the plan. As Marketwatch reports, Democrats in the U.S. House of Representatives Committee on Financial Services have penned a letter to Facebook detailing their concerns about Libra.

In the letter addressed to Facebook founder and CEO Mark Zuckerberg, COO Sheryl Sandberg, and new Calibra CEO David Marcus, the committee wrote, “The scant information provided about the intent, roles, potential use, and security of the Libra and Calibra exposes the massive scale of the risks and the lack of clear regulatory protections. These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past.” The letter concluded, “Because Facebook is already in the hands of over a quarter of the world’s population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action. During this moratorium, we intend to hold public hearings on the risks and benefits of cryptocurrency-based activities and explore legislative solutions. Failure to cease implementation before we can do so risks a new Swiss-based financial system that is too big to fail.” Committee Chairwoman Representative Maxine Waters signed the letter along with Committee Chairs Representatives Carolyn Maloney, Lacy Clay, Al Green, and Stephen Lynch.

Facebook announced its plans for Libra last month, including a preliminary list of partners such as Ebay and Lyft that intended to accept the currency upon its launch. As the committee’s letter alludes to, Libra will not be operated by Facebook themselves and will instead be overseen by the Libra Association to be headquartered in Geneva, Switzerland. However Facebook is creating Calibra, which will serve as a wallet for the new token.

Obviously this isn’t the first time Facebook has found itself under Congressional scrutiny. The platform has been a frequent target for lawmakers who have brought Zuckerberg to Capitol Hill to discuss everything from Russia’s influence on the 2016 election to consumer privacy. Notably these interactions have yet to yield any real regulations for the platform and it’s unclear if this time will be any different. For now, Libra is expected to launch next year.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

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