Last month Facebook stormed the crypto world by releasing the white paper for the Libra cryptocurrency. As Facebook plans to launch Libra in early 2020, lawmakers make sure that it is not an easy way for the social media giant.
Shortly after the publication of the Libra white paper, US lawmakers attacked Facebook to express their concerns about the project. This month, on July 16 and 17, Facebook is already scheduled for hearings with Congress. But in a recently published letter, privacy and consumer watchdogs in North America have asked the congress to stop the Facebook developments.
There are nearly 30 legislators from different departments who sign the document. They write:
“We appeal to Congress and the regulators to set a moratorium on the scales and related plans of Facebook until the profound questions raised in the proposal are addressed”.
These regulators ask various questions and concerns about the influence of Libra on the global economy. That is why the signatories say that before Facebook goes ahead with the development, they must erase a number of things. The document states:
“The plan for Libra makes explicit and implicit promises to consumers – such as the claim that value will remain stable – but what is to prevent the Libra Association from changing its policy, for example to lower the value of Libra or to put a microtax on every Libra transaction? “
The House Financial Services Committee, chairman Maxine Waters, has also expressed doubts about facebook cryptocurrency ability to execute such a huge project. Waters said that if we look at Facebook’s past mismanagement of dealing with user data and privacy, there are many things the company can answer.
Concerns about privacy
In this letter, the signatories have agreed to support Maxine Waters and to ask questions about Facebook’s dark past. The legislators wrote:
“It seems that these products can lend themselves to a completely new global financial system based on Switzerland and intended to match US monetary policy and the dollar. This leads to serious privacy, trade, national security and monetary policy issues not only for Facebook & # 39; s more than 2 billion users, but also for investors, consumers and the wider global economy “.
The legislators added that Facebook hardly provides any information in the Libra white paper about how it would address regulatory issues. They add that if products and services like these are easily passed on without assessing their implications, they can pose a potential threat to the global financial system. The letter says, “These vulnerabilities can be abused and disguised by bad actors because other cryptocurrencies, exchanges, and wallets have been in the past.”
“Since Facebook is already in the hands of more than a quarter of the world’s population, it is imperative that Facebook and its partners immediately stop implementing plans until regulators and Congress have the opportunity to investigate these issues and take action,” said the letter. “During this moratorium, we plan to hold public hearings on the risks and benefits of cryptocurrency-based activities and investigate legislative solutions. If we do not stop implementation before we can do so, a new, risky Switzerland-based financial system that is too large to fail. “