Innovation

Facebook asked by lawmakers to pause Libra cryptocurrency project

Congresswoman Maxine Waters asked Facebook to halt movement of its Libra project until hearings can be held to examine concerns, while French Finance Minister has called for tighter cryptocurrency regulation.

Written by Asha Barbaschow, Contributor June 18, 2019 at 6:23 p.m. PT

Facebook on Tuesday revealed its plans for a long-awaited cryptocurrency play, with Libra slated for launch in 2020.

It is expected Libra will integrate with the company's apps and services, and go head-to-head with the likes of Bitcoin, but US lawmakers aren't as excited by the idea as the social media giant is, with Congresswoman Maxine Waters, chair of the House Financial Services Committee, asking Facebook to pause its project.

"With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users," Waters said in a statement.

"Given the company's troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action."

She has also asked that Facebook executives come before the Committee to provide testimony on these issues.

Facebook is working alongside 27 partners to launch Libra, which is expected to be released alongside a new digital wallet that works with Messenger and WhatsApp. Users will be able to use Libra to purchase products, send money across borders, or make donations.

"The cryptocurrency market currently lacks a clear regulatory framework to provide strong protections for investors, consumers, and the economy," Waters contined.

"Regulators should see this as a wake-up call to get serious about the privacy and national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies."

Pointing to the Cambridge Analytica scandal that still plagues Facebook, Waters continued by saying the social media giant has "repeatedly shown a disregard for the protection and careful use" of the data it holds on billions of people.

Waters has the backing of Patrick McHenry, a top Republican on the House Financial Services Committee, who asked for a hearing on Libra.

"While there is great promise for this new technology in fostering financial inclusion and faster payments, particularly in the developing world, we know there are many open questions as to the scope and scale of the project and how it will conform to our global financial regulatory framework," he wrote in a letter to the Congresswoman.

Libra also has the attention of lawmakers in Europe, with calls for tighter regulation emerging from French Finance Minister Bruno Le Maire, who according to Bloomberg said the digital currency shouldn't be seen as a replacement for traditional currencies.

"It is out of question'' that Libra "become a sovereign currency,'' the report quotes Le Maire as saying in an interview on Europe 1 radio. "It can't and it must not happen."