Last month, a group of U.S. senators asked Facebook questions about the Libra cryptocurrency. Apparently, the social media giant, who is now dabbling into fin-tech, is still working on its responses to a plethora of consumer protection. Facebook had yesterday unveiled Libra project shedding much light on what it has brought with it via the white paper, this is of course after months of speculation and rumors.
The concern of the US lawmakers was revealed in an open letter to Facebook at the beginning of May, asking them a number of questions about Libra, after word of the project leaked out in the press. The questions contained therein were basically in regard to user privacy and data protection, though a few concerned the cryptocurrency network itself.
A Facebook spokesperson had told to press “We received the letter and are addressing the senators’ questions,” at about yesterday morning.
The first two questions the senators asked were: How would this new cryptocurrency-based payment system work, and what outreach has there been to financial regulators to ensure it meets all legal and regulatory requirements? And What privacy and consumer protections would users have under the new payment system? Facebook’s published documentation gave off an idea of what the answers to some of the committee’s questions might be.
The mechanism has been outlined in Facebook’s new Libra white paper and supporting documentation that the Libra token is fully backed by fiat currencies and government securities. Also revealed was that, the Libra investment token gives its governance council the ability to monitor and modify the network and its protocols.
In other documentation they said that from various U.S. states that treat cryptocurrencies as money they (Facebook and its new Calibra subsidiary) would secure money transmitter licenses. Facebook’s Calibra has gone through the due procedure by its registration as a money services business (MSB) to operate within its capacity but this does not indicate any sort of regulatory approval to answer the first question in totality. They, however, expressed intended cooperation with European Union and Financial Action Task Force (FATF) guidelines, as well as the laws of each jurisdiction it provides services in.
Also in Facebook's documentation is where it says that neither Facebook nor Calibra will share or sell any consumer information (or information derived from such data) with any unaffiliated third parties without consent from the customer. The Senators had also asked Facebook a question in this regard.
This, however, does not change the fact that no direct response was given to the U.S Lawmakers, but Facebook has supposedly ‘addressed’ them in the white paper published. There are, in actual fact, four more questions the senators will want specific answers to. But the senators’ letter did not give a deadline for Facebook to respond, hence there is no clear date for answers to come forth.
Credits - Nikhilesh De
Published at: 1 week ago
Published at: 2 weeks ago
Published at: 2 weeks ago
Published at: 1 month ago