UK Legal Committee Will Look to Investigate Libra, Suspecting Its Power Could Pose a Risk for Fraud
- The release of Libra’s whitepaper has sparked concerns from lawmakers.
- To understand the cryptocurrency better, the UK financial authorities may move to probe the project.
The release of the Libra whitepaper from Facebook last month has been met with many different reactions around the world. In the UK, lawmakers have expressed a fear that this cryptocurrency could ultimately have too much power in the economy. As such, there are suggestions that a parliamentary committee in the UK will end up moving to probe the project.
Damian Collins, the chair of the House of Commons’ Digital, Culture, Media, and Sport Committee, spoke recently to Financial News about the issues regarding privacy within the social media platform. As such, Collins expressed concern that Facebook may not be able to protect the financial details of the individuals that would ultimately use Libra.
In launching Libra, Collins believes that Facebook could be
“almost trying to turn itself into its own country.”
Even though this community wouldn’t be physically within a nation contained by borders, Facebook already has established
“a global community who are solely under the oversight of Mark Zuckerberg.”
“If we’re going to have this payment system created by Facebook that exists within a Facebook walled garden, which no one really has access to or can question, then our concern has got to be that this system is going to be open to massive fraud.”
David Marcus spoke about these concerns before the Senate hearings, commenting,
“You won’t have to trust Facebook to get the benefit of Libra.”
He added that the Libra Network won’t impose any “special responsibility” on Facebook. However, Marcus stated,
“We’ve been clear about how our approach to financial data separation and we will live up to our commitments and work hard to deliver real utility.”
Throughout the world, regulators have voiced their need for more information from the Libra project before it launches. Furthermore, nearly every regulator has stated that Libra is going to need regulations in their areas to actually move forward.
In France last week, the G7 addressed the stablecoin, saying that these types of cryptocurrency could threaten global financial stability. Creating rules that follow the “highest” standards could be the only chance of reducing the chances of the token being used for money laundering and terrorism funding.
In June, Mark Carney, the Bank of England’s governor, made similar comments, but ultimately expressed an “open minded” attitude on Libra’s utility.