Facebook Libra: Five Democrats, led by the chair of the Financial Services Committee of the Parliament Maxine Walters, sent a letter to Facebook asking to immediately stop the development of the Libra cryptocurrency project.
The letter argues that regulatory authorities should examine many different matters, such as their concerns about privacy, trade, national security and the monetary policy of Libra products, as “it is an entirely new global financial system based in Switzerland and intended to compete with the monetary policy of the US and the dollar”.
The letter also claims that Facebook has not provided much information about its plans for the specific project.
“If products and services like these are inappropriately regulated and without adequate oversight, they could create systemic risks that would jeopardize U.S. and global financial stability,” the letter states.
These vulnerable points could be exploited and covered up by malicious users as well as other cryptocurrencies, exchanges, and wallets, as we have seen in the past. Regulatory authorities worldwide have already expressed similar concerns, highlighting the need for strong oversight.
“Given the company's problematic past, I ask Facebook to agree to a moratorium before proceeding with any move to develop the cryptocurrency until Congress and regulatory authorities have the opportunity to examine these issues and take action”, Walters said.
Walters will convene a panel on July 17, called Examining Facebook's Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System, to discuss the Libra project, the risks, and the benefits of cryptocurrency activities.
The company unveiled its plans for Facebook Libra on June 18, saying it plans to launch the new digital currency in 2020.
The Libra cryptocurrency will be a global currency of Facebook, and it can be used to purchase products, send money across borders, or make donations. The social network is said to be collaborating in parallel with 27 partners to launch Libra, which is expected to launch alongside a new digital wallet that will work with the Messenger and WhatsApp applications.
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