Facebook’s plans to launch a new currency in cahoots with other digital giants is encountering heavy interference from the Congress and the Federal Reserve despite extensive lobbying by the company.
The stated purpose of the cryptocurrency developed by Facebook currently known as Libra is to provide free and-or low-cost financial services worldwide.
“Imagine an open, interoperable ecosystem of financial services that developers and organizations will build to help people and businesses hold and transfer Libra for everyday use,” wrote the authors of the white paper introducing Libra.
Members of Congress worry that the motivations behind Libra aren’t as benign as stated.
“While I have serious questions about Facebook’s plans and intentions — such as how the technology will be employed and why they chose to do this in Switzerland rather than in the United States — a hearing will provide us an opportunity to learn more about their plans,” said Representative Patrick McHenry (R-NC).
House Financial Services Committee chair Maxine Waters has asked to halt the development of Libra altogether.
“Facebook has data on billions of people and has repeatedly shown a disregard for the protection and careful use of this data [and] is continuing its unchecked expansion and extending its reach into the lives of its users… 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,” said Waters in a statement.
Federal Reserve Chairman Jay Powell shared similar concerns in his testimony before the House of Representatives.
“Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” said Powell.
David Marcus, the Facebook official heading the Libra project responded to the statements earlier this week.
“We understand that big ideas take time, that policymakers and others are raising important questions, and that we can’t do this alone,” wrote Marcus.