House Democrats have asked Facebook to cease development of the proposed cryptocurrency project Libra and digital wallet Calibra until Congress and regulators can assess possible risks to the global financial system.
The project has a 2020 launch date.
Rep. Maxine Waters (D-CA), chairwoman of the House Financial Services Committee, has spoken out against the project since it was announced in June. Waters’s letter today, sent to Facebook’s CEO Mark Zuckerberg, Chief Operating Officer Sheryl Sandberg, and Calibra CEO David Marcus, formalizes a request for a moratorium from a few weeks ago, The Verge reported.
The letter is also signed by four House Finance subcommittee leaders including Carolyn Maloney (D-NY), Chairwoman of 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.
“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,” Water wrote. “These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past.”
The letter expressed concerns with Facebook’s track record on privacy and the potential for Libra to act as a new global currency system.
“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.
Libra has 27 launch partners including crypto exchange Coinbase. At least 100 members of the Libra Association will act as the cryptocurrency’s governing council when the token goes live, Coindesk reported.
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The House Financial Services Committee has a hearing scheduled for July 17 to discuss Libra.
Since the project’s formal announcement, regulators and government entities around the world have expressed concern. Members of the G7 formed a task force to look into the project with calls for Facebook to share more details or cease development.
