US Lawmakers have recently sent an open letter to Facebook asking them to halt their development on Libra cryptocurrency as it poses a threat to the global financial system. According to US lawmakers, Libra can create havoc in the national monetary policy and create disruption in the dollar.
The US lawmakers have written in the letter:
“We intend to hold public hearings on the risks and benefits of cryptocurrency-based activities and explore legislative solutions. Failure to cease implementation before we can do so, risks a new Swiss-based financial system that is too big to fail.”
The letter further illustrates that Libra can create some serious privacy, trading, national security, and monetary policy concerns not only for Facebook but also for the investors, consumers and the entire global economy. The dangers of Libra were highlighted because Facebook was unable to clarify the intent, roles, potential use and security of this newly devised cryptocurrency product.
Facebook did publish a white paper on Libra and Calibra but it provided very little information.
The letter has been signed by representative Maxine Waters and other house democrats claiming the currency exposes a massive scale of risks and lack of clarity when it comes to regulatory protection.
The letter further highlighted Facebook’s privacy concerns and spotlighted the Cambridge Analytica scandal. How the political consultancy firm was able to get hands-on 50 million Facebook users without Facebook’s knowledge still leaves a big question mark on the credibility of the organization.
The letter further states:
“Because Facebook is already in the hands of a over 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,”
Facebook Braces Itself for Two Congressional Hearings
A hearing is scheduled by the US Senate Committee on Banking, Housing and Urban Affairs regarding Libra on the 16th of July.
The hearing is titled as,
“Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations”
Where the committee will learn more about how Libra works and also seek inputs from regulators and market watchdogs. Waters further announced that the House Financial Services Committee will hold another hearing dated 17th of July, right after the banking committee is done with their hearing.