Facebook’s digital currency Libra is in the news again but seemingly for all the wrong reasons. According to the reports doing the rounds since 2nd July 2019. The social networking giant has received a formal letter from the US lawmakers that asks the company to officially put the development of their cryptocurrency project Libra along with its digital wallet Calibra on hold until the House Congress, as well as the regulators, have investigated all the potential risks the project could cause to the financial system at a global level.
The letter has been addressed to Mark Zuckerberg (the CEO of Facebook), Sheryl Sandberg (Facebook’s Chief Operating Officer), as well as David Marcus (the CEO of Calibra) and signed by the Chairwoman of the House Financial Services Committee – Maxine Waters (D-CA), the Investor Protection, Entrepreneurship and Capital Markets Subcommittee’s Chair – Carolyn Maloney (D-NY), the Housing, Community Development and Insurance Subcommittee’s Chairman – William Lacy Clay (D-MO), Chairman of the Task Force on Financial Technology – Stephen F. Lynch (D-MA), and the Oversight and Investigations Subcommittee’s Chairman – Al Green (D-TX).
Ever since the news broke out, Twitter has been buzzing with the update.
Members of Congress just sent this letter to Facebook asking them to officially stop development of Libra.
Wait till Congress finds out they can’t send letters to Bitcoin? pic.twitter.com/rCG1jh4RhL
— Pomp ? (@APompliano) July 3, 2019
Breaking: Members of the Congressional House Committee on Financial Services, Chaired by Rep Maxine Waters have asked Zuckerberg & Facebook to:
“immediately agree to a moratorium on any movement forward on Libra”
The letter references exchange hacks and Cambridge Analytica pic.twitter.com/3INx0yz5Pg
— Bruce Fenton (@brucefenton) July 2, 2019
It must be noted that prior to formalizing this request, Waters had suggested such kind of a move almost immediately post the announcement of the Libra project. The letter poses serious concerns about the previous track record of Facebook referencing the privacy issues and the infamous Cambridge Analytica case.
The letter says the company’s Libra crypto, which has set its bases in Switzerland has intentions of rivaling both the US dollars and monetary policies. Continuing further, the letter also highlights that the project raises huge concerns regarding privacy, national security, monetary policy, and trading for more than 2 billion users of Facebook along with the global economy, investors, and consumers.
Moreover, the little information provided in the project’s white paper about Calibra and Libra’s roles, intent, security, and potential use is also a problem. It exposes major risks while outlining the absence of the clear regulatory protections, states the letter. According to the lawmakers, those transacting and using Facebook’s crypto and digital wallet may be exposed to serious cybersecurity and trading risks and may end up falling prey to hackers.
If that was not all, the letter went on to claim that the Libra project could provide “an under-regulated platform for illicit activity and money laundering.” To conclude, the letter stated that it is crucial for Facebook and the firm’s partners to immediately stop the implementation plans until the Congress and regulators have examined the threats in order to take appropriate actions given the social network is utilized by a quarter+ population of the world.
The lawmakers also wrote that public hearings would be held by them during this moratorium to not only assess the benefits and risks of crypto-based activities but also explore the legislative solutions. This public hearing is scheduled for 17th July, per the reports.
In the meanwhile, Marcus is slated to attend a hearing on 16th July held by Mike Crapo (R-ID), the Chair of Senate Banking, citing the data privacy threats and crypto concerns posed by the project.