Formally, U.S. lawmakers have now called on Facebook to halt development processes of its Libra cryptocurrency via a new letter addressed to its executives. In an open letter to Facebook dated Tuesday, Democrats from the U.S. House of Representatives called on a moratorium to all Libra development. This is in order to carry on with the hearings to be held for determining how the Libra project would operate and what protections would be implemented to protect user privacy. Affiliate subcommittees and the Financial Services Committee are to hold their separate hearings this month as announced before.
The letter addressed to Facebook CEO Mark Zuckerberg, COO Sheryl Sandberg and Calibra CEO David Marcus was signed by top personnel including Representatives Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee; Carolyn Maloney (D-NY), Chair of by the Investor Protection, Entrepreneurship and Capital Markets Subcommittee; William Lacy Clay (D-MO), Chairman of the Housing, Community Development and Insurance Subcommittee; Al Green (D-TX), Chairman of the Oversight and Investigations Subcommittee; and Stephen F. Lynch (D-MA), Chairman of the Task Force on Financial Technology.
Previously, Waters had called on Facebook several times to pause development of Libra, but this is the first time she has done so formally through the letter to the company. According to the letter, concerns about Facebook's track record as well as the potential for Libra to act as a new global currency system were tabled. “It appears that these products may lend themselves to an entirely new global financial system that is based out of Switzerland and intended to rival U.S. monetary policy and the dollar. This raises serious privacy, trading, national security, and monetary policy concerns for not only Facebook’s over 2 billion users, but also for investors, consumers, and the broader global economy,” the lawmakers wrote and added:
“While Facebook has published a ‘white paper’ on these projects, the scant information provided about the intent, roles, potential use, and security of the Libra and Calibra exposes the massive scale of the risks and the lack of clear regulatory protections. If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger U.S. and global financial stability. These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past.”
The lawmakers further addressed privacy issues involving the social media giant and referenced some of them from recent time. The letter said “Because Facebook is already in the hands of over a quarter of the world’s population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action,” and continued “During this moratorium, we intend to hold public hearings on the risks and benefits of cryptocurrency-based activities and explore legislative solutions. Failure to cease implementation before we can do so, risks a new Swiss-based financial system that is too big to fail.”
Also notable is that a Few days ago, Facebook had reportedly briefed Congressional aides about the project. Drawn from the briefing, they pushed for an early launch which was not unanimously supported and discussed how libra would be regulated amongst other things.
Credits- Nikhilesh De
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