Libra, set to be launched next year, will let people make payments via Facebook’s apps and WhatsApp.
But the company should wait until the US Congress has examined the project, according to the chairwoman of the House Financial Services Committee.
Facebook said it looked forward to responding to policymakers’ questions.
“Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a crypto-currency until Congress and regulators have the opportunity to examine these issues and take action,” said Democratic congresswoman Maxine Waters.
Sen. Mark Warner, a Democrat, echoed the sentiment, saying Facebook is a company that has lost Americans’ trust in its ability to keep their data private.
“The idea that we are going to turn over our financial data and information to that company, I think they have a big uphill effort to try to convince Americans that they ought to trust in Facebook’s proprietary interest in keeping your data secret,” Warner said.
A Facebook spokesperson told CNBC, “We look forward to responding to lawmakers’ questions as this process moves forward.”
Waters and McHenry joined a small, bipartisan group of lawmakers in expressing concern about the Libra project.
You can read Waters’ full statement below:
Facebook has data on billions of people and has repeatedly shown a disregard for the protection and careful use of this data. It has also exposed Americans to malicious and fake accounts from bad actors, including Russian intelligence and transnational traffickers. Facebook has also been fined large sums and remains under a Federal Trade Commission consent order for deceiving consumers and failing to keep consumer data private, and has also been sued by the government for violating fair housing laws on its advertising platform.
“With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users. The cryptocurrency market currently lacks a clear regulatory framework to provide strong protections for investors, consumers, and the economy. 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. 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. Facebook executives should also come before the Committee to provide testimony on these issues.
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 become “too big and too powerful,We cannot allow Facebook to run a risky new crypto-currency out of a Swiss bank account without oversight,” he said in a statement.
According to a letter seen by the Financial Times, the G7 nations plan to set up a working group to evaluate the risks of currencies like Libra.
The participants will examine, for example, the potential for Libra to be exploited by money-launderers.
It’s not yet clear how many of Facebook’s 2.38 billion users worldwide would make use of Libra – but given the size of the social network, it is possible that the crypto-currency could become a significant financial force.