Facebook’s upcoming Libra cryptocurrency project continues to attract scrutiny from regulators and lawmakers around the globe.
Industry website Coindesk reported yesterday that a group of US privacy and consumer watchdogs had called on the US Congress to freeze development on the Libra cryptocurrency. According to an open letter, signed by more than 30 organisations including the Center for Digital Democracy, the Consumer Federation of America and Consumer Reports, Facebook’s plan “to create a new cryptocurrency as part of its broader Libra project raises profound questions about national sovereignty, corporate power, consumer protection, competition policy, monetary policy, privacy and more”. The watchdogs argued that the exiting regulatory systems around the world were not prepared to “address these questions” and urged the Congress to impose a moratorium on Libra and “related plans” until the questions were addressed.
The potential risks highlighted in the letter are related to privacy, consumer protection, law enforcement, national sovereignty and more.
Also yesterday, four members of the US House of Representatives published an open letter, urging Facebook and its partners to “immediately agree to a moratorium on any movement forward on” Libra and its cryptocurrency wallet. The lawmakers said that the project might lend itself to “an entirely new global financial system that is based out of Switzerland and intended to rival U.S. monetary policy and the dollar”. They also argued that the project raised privacy, trading, national security and monetary concerns for not only Facebook’s massive user base, but also for investors, consumers and the broader global economy.
Facebook officially announced its plans to launch Libra in 2020. The project will be overseen by Libra Association, an independent consortium based in Geneva, Switzerland. The consortium’s “founding members” include major companies such as Visa, MasterCard, Uber Technologies and Vodafone Group.
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