Libra “Must Not Happen,” Facebook Cryptocurrency Plans Run Into Political Opposition
- Social Media giant could become a “Shadow Bank,” “We cannot allow Facebook to run a risky new cryptocurrency”
- This will allow Facebook to assemble even more data “which only increases our determination to regulate the internet giants”
On Tuesday, Facebook unveiled its plan for its cryptocurrency Libra which is slated for launch in 2020. However, it has already run into political opposition.
Congresswoman Maxine Waters, chair of the House Financial Services Committee is asking Facebook to pause its project.
“With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users,” Waters said in a statement.
“Given the company's troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action.”
“We cannot allow Facebook to run a risky new cryptocurrency”
Waters also asked that Facebook executives come before the Committee to provide testimony on these issues. The company is working alongside 27 partners that involve big players for Libra project.
“The cryptocurrency market currently lacks a clear regulatory framework to provide strong protections for investors, consumers, and the economy,” Waters added.
“Regulators should see this as a wake-up call to get serious about the privacy and national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies.”
Pointing to the Cambridge Analytica scandal where the company used data of users’ Facebook profile without them knowing, Waters continued that social media giant has “repeatedly shown a disregard for the protection and careful use” of the data it has on billions of people.
Waters also has the backing of a Republican on the House Financial Services Committee
Patrick McHenry, who asked for a hearing on Libra,
“While there is great promise for this new technology in fostering financial inclusion and faster payments, particularly in the developing world, we know there are many open questions as to the scope and scale of the project and how it will conform to our global financial regulatory framework,” McHenry wrote in a letter to the Congresswoman.
Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight. https://t.co/IjZOFNai3r
— Sherrod Brown (@SenSherrodBrown) June 18, 2019
Facebook Could Become A “Shadow Bank”
Facebook’s ambitious plan is also getting the attention of lawmakers in Europe, with calls for tighter regulation of Facebook.
In an interview on Europe 1 radio, French Finance Minister Bruno Le Maire said the digital currency shouldn't be seen as a replacement for traditional currencies. “It is out of question’’ that Libra “become a sovereign currency,” said Le Maire adding “It can’t and it must not happen.”
His concerns include privacy, terrorism finance, and money laundering. Le Maire has called on a Group of Seven central bank governors to prepare a report on Libra for July meeting.
Meanwhile, Bank of England Governor Mark Carney said while “we need to have an open mind” about technology, “we will look at it very closely and in a coordinated fashion.”
Markus Ferber, a German member of the European Parliament said with 2 billion users, Facebook could become a “shadow bank” and regulators should be on high alert.
“This money will allow this company to assemble even more data, which only increases our determination to regulate the internet giants,” Le Maire said in parliament.