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Members of US Congress demanding Facebook put Libra on hold

Members of US Congress demanding Facebook put Libra on hold

Four members of the House of Representatives sent a letter to Facebook calling for an immediate moratorium on its cryptocurrency Libra, saying both regulators and Congress needs more time to investigate the risk it could pose to the global economy.

Members of Congress attempting to put Libra on hold

Regulator’s distaste for Facebook’s Libra has grown significantly in the past couple of weeks. And while the backlash against the controversial cryptocurrency project has been significant, now a few members of Congress have decided to take the matter into their own hands and put a hold on Libra.

The House of Representatives’ Committee on Financial Services asked for a moratorium on the development of both Libra, Facebook’s digital currency, and Calibra, its native cryptocurrency wallet.

In an official letter addressed to Facebook executives Mark Zuckerberg, Sheryl Sandberg, and David Marcus, lawmakers said that Libra “raises serious privacy, trading, national security, and monetary policy concerns for not only Facebook’s over two billion users, but also for investors, consumers, and the broader global economy.”

Democratic representatives Maxine Waters, Carolyn Maloney, William Lacy Clay, Al Green, and Stephen F. Lynch all signed onto the letter, saying they intend to hold public hearings on the risks and benefits of crypto-based activities.

“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 issues and take action,” it said in the letter.

 

Bipartisan agreement on security risks posed by Libra

Democrat lawmakers pointed out that Libra was improperly regulated and lacked sufficient oversight and as such could pose “systemic risks” that endanger both U.S. and global stability.

“These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past.”The letter also referenced the Cambridge Analytica scandal, saying that Facebook remains under a consent decree “for deceiving consumers and failing to keep consumer data private.”

The strong language in the lawmakers’ letter shows just how worried they are about Libra. Concern over Facebook‘s impact on the global financial system also seems to be one of the rare bipartisan issues in U.S. politics—Republicans are also anxious to resolve Libra’s privacy issues.

While the House of Representatives’ Committee on Financial Services will hold a hearing on Libra on July 17, the Republican-led Senate Banking Committee scheduled its own meeting on Libra on July 16. Last month, sources revealed that David Marcus, the CEO of Calibra, will be testifying.

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Priyeshu Garg

Priyeshu is a software engineer who is passionate about machine learning and blockchain technology. He holds an engineering degree in Computer Science Engineering and is a passionate economist. He built his first digital marketing startup when he was a teenager, and worked with multiple Fortune 500 companies along with smaller firms. When he is not solving the transportation problems at his company, he can be found writing about the blockchain or roller skating with his friends.

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