US Congressional Committee is officially seeking Facebook to stop the development of Libra cryptocurrency along with digital wallet Calibra – until lawmakers investigate the possible risk it may bring across the global financial system.
Letter Requesting Moratorium on Libra
Facebook’s Libra has received a lot of criticism so far and one of which includes US’s congressional committee. An official letter has been written to Facebook’s CEO Mark Zuckerberg, Chief Operating Officier Sheryl Sandberg, and the chief executive officer of Calibra, David Marcus. The letter is representing law maker’s concern to Facebook and asking for freezing up the development of Libra Coin and Calibra.
The letter was sent by Rep. Maxine Waters (D-CA) – the chairwoman of the House Financial Services Committee, Carolyn Maloney (D-NY) – Chair of the Investor Protection, Entrepreneurship & Capital Markets Subcommittee, Al Green (D-TX) – Chairman of the Oversight & Investigations Subcommittee – and – Stephen F.Lynch (D-MA) – Chairman of the Task Force on Financial Technology.
Rep. Maxine Waters had earlier spoke openly on the same regard. But at this point in time, the letter is also signed by all these leaders.
The letter reads that;
“If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger the U.S. and global financial stability,” Congress Chairwoman writes. “These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past.”
Though, it’s not the first time when policymakers showed their concern over Libra – the case is quite different in the case of Switzerland. While the US is requesting Facebook to halt Libra development, Switzerland’s regulators are eagerly welcoming Facebook to discuss the potential benefits Libra can bring, in fact, they’re in talks with Facebook to set up shop for Libra Association in Geneva, Switzerland.
Water’s letter isn’t the only one trending as a criticism to Libra today – indeed, Senate Banking Chair Mike Crapo (R-ID) scheduled a hearing with the chief executive of Calibra, David Marcus for 16th July 2019. In the meantime, Water’s committee will also schedule a hearing on the Libra project.
Until today, we’ve seen Facebook responding to lawmakers positively – as such, very recently, it had responded to UK lawyer on the concern of “Big Tax Problem” Facebook’s Libra can create, Facebook’s spokesperson said, we look forward to working with policymakers to discuss and clarify the application of existing tax laws for crypto asset’.
Facebook’s Response to Letter
Similarly, on US’s congress woman’s letter, Facebook responded to media’s query on Tuesday and stated;
“We look forward to working with lawmakers as this process moves forward, including answering their questions at the upcoming House Financial Services Committee hearing,
It has become the major concern for lawmakers because Facebook holds billions of users and the key vision behind Libra is to empower these billions with the financial facility. At the same time, the independent body to govern Libra, the Libra association is in the hands of few private players including Vodafone, Visa, PayPal, Uber, Spotify, Facebook, MasterCard and intending to reach 100 more by next year – which is again raising the eyebrows of market leaders like Facebook’s co-founder Chris Huges who is citing the issue of power on private players.
Concerning Facebook’s influence over the world’s population, the letter adds;
“They kept selling Libra as a means of providing banking services to 1.7 billion unbanked people around the world. When challenged on how they were going to do that and asked directly whether they’d figure out how exactly a digital currency would be an answer for people who can’t access credit currently, they said, ‘The short answer is no.’ The phrase ‘the miracle of blockchain’ was used at one point.”
The letter further writes;
“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 risks and take action,”
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Tabassum is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies. Follow her on Twitter at @Tabassumnaiz and reach out to her at Tabassum[at]coingape.com