A US lawmaker has said Facebook should delay the launch of its Libra cryptocurrency, hours after the social network formally announced the project.
Libra, due to launch next year, will allow people to make payments through the Facebook and WhatsApp apps. But the company should wait until the US Congress has considered the bill, according to the chair of the House Financial Services Committee. Facebook said it hoped to answer questions from lawmakers. Given the company’s troubled past, I request that Facebook agree to a moratorium on any progress in cryptocurrency
Development until Congress and regulators have an opportunity to examine these issues and take action,” said Democratic Congresswoman Maxine Waters. She cited the firm’s history of controversies involving user data among her concerns and asked Facebook executives to testify before her committee. We look forward to answering questions from lawmakers as this process progresses,” a Facebook spokesperson said.
Facebook plans to allow its users to buy Libra and store it online in a digital wallet called Calibra. It would then be transferable between users and could eventually be used to pay bills or buy things. US Senator Sherrod Brown, who sits on the Senate Banking Committee, said he thought Facebook had gotten too big and too powerful. become systemic and will have to be subject to the highest standards of regulation.
“We cannot allow Facebook to run a new risky cryptocurrency from an unsupervised Swiss bank account,” he said in a statement. UK regulators are not yet waving a red flag in front of Facebook’s cryptocurrency train, but they are making it clear that if it accelerates, they will want to intervene. Or as the Governor of the Bank of England, Mark Carney, said yesterday about the crypto-market in general.
If Libra wants to be a major player in the UK payments system, it will have to be regulated by the Financial Conduct Authority and show that it knows who its customers are and that it has strong controls against money laundering. Existing money transfer companies say that complying with all the rules can be a burdensome and expensive business. With that said, I do spot some skepticism among regulators about the outlook for Facebook’s currency in the UK.