Facebook has recently announced it’s creating a new “low-volatility” cryptocurrency that’s fully fiat-collateralized called Libra (LBR). Some lawmakers have already weighed in on it, and some are calling for the company to halt the project.
The cryptocurrency is set to launch in 2020 and will be integrated into the company’s apps and services. It’s backed by the Libra Association, and works using the Libra Blockchain. As reported by ZDNet, U.S. Congresswoman Maxine Waters, the chair of the House Financial Services Committee, asked the social media giant to put it all on hold.
Waters, through a statement, argued that Facebook is “continuing its unchecked expansion and extending its reach into the lives of its users,” and added:
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.
She further asked the company’s executives to come before the Committee to provide a testimony on the Libra project. Waters also addressed the cryptocurrency ecosystem as a whole, claiming it “currently lacks a clear regulatory framework to provide strong protections for investors, consumers, and the economy.”
Per the Congresswoman’s words, regulators should use Facebook’s move to create its own cryptocurrency 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.”
As reported, Facebook is working alongside 27 partners and will launch its own cryptocurrency wallet that’ll work with its Messenger and WhatsApp apps. Its goal is to give users throughout the world access to financial services, borrowing elements from bitcoin and ethereum to do so.
Waters also pointed to the Cambridge Analytica scandal, and claimed Facebook has shown “disregard” for protecting user data. Patrick McHenry, a top Republican on the House Financial Services Committee, backed her point of view and asked for a hearing on Libra.
Critics Weigh in on Facebook's Libra as Roubini Labels it a 'Monopoly Scam' https://t.co/1ymnllsdAC #Facebook #Libra #NourielRoubini #Twitter #NilayPatel #NadimKobeissi #AndrewYang #BrunoLeMaire
— CryptoGlobe (@CryptoGlobeInfo) June 18, 2019
McHenry revealed he believes there’s “great promise for this new technology in fostering financial inclusion and faster payments,” but added there are some questions left unanswered on how Libra will confirm with the global financial regulatory framework.
Over in France, Finance Minister Bruno Le Maire, Bloomberg reports, called for tighter regulations on the cryptocurrency space, noting Libra shouldn’t be seen as a replacement for traditional fiat currencies.
As CryptoGlobe covered, cryptocurrency experts like Andreas Antonopoulos and Charlie Shrem have, meanwhile, revealed Facebook’s Libra won’t be competing with cryptos like Bitcoin, but with traditional financial services providers like Visa, MasterCard, and PayPal.