Barely a day has gone by since Facebook announced its highly anticipated digital currency (or currencies), it is already embroiled in regulatory and government opposition from political elites from Europe and the United States.
Facebook seems to want to bring economic sovereignty and financial inclusion using its Libra ‘cryptocurrency’, however, its foray into the cryptocurrency world may have rubbed the wrong people the wrong way already. So far, the United States House Financial Services Committee chairwoman Rep. Maxine Waters has called for the halt of the development of the Libra cryptocurrency whose whitepaper was released by Facebook on Tuesday, June 18th.
Waters’ concerns are based on the previous controversy that has surrounded Facebook regarding the privacy of user data and its policy on data collection and management.
“Regulators should see this as a wake-up call to get serious about the privacy and national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies,” she said in a statement.
“Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action.”
From Europe, the French Finance Minister Bruno Le Maire said that Facebook’s digital coin Libra should not be seen as a replacement to the government regulated fiat currencies. It will not become a sovereign currency and neither should it be allowed to be one. “It can’t and it must not happen,” he said during an interview on Europe 1 radio on Tuesday.
Similar to Waters’ concerns, Le Maire wants some assurances from Facebook on data policies and privacy of transaction data before the coin launches. He also would like to know how the new coin will deal with money laundering and terrorist financing. Le Maire has called on the central banks’ governors of the G7 member states to prepare a report on the Libra project before their meeting coming up next month.
Speaking at the ongoing European Central Bank’s annual symposium in Sintra, Portugal, Mark Carney, the Governor to the Bank of England expressed an open mind towards the Facebook coin and asked his counterparts to have “an open mind” towards technology.
“Anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation,” he said.
The US House representatives are calling for a forum to discuss the implications of the new project. In a letter to Waters, U.S. Rep. Patrick McHenry stated that,
“We need to go beyond the rumors and speculations and provide a forum to assess this project and its potential unprecedented impact on the global financial system.”