With the unveiling of the white paper from Libra, Facebook’s own cryptocurrency, Facebook has sparked a lot of uproar. Several US legislators as well as more than 30 US lobby groups have sent public letters to Facebook with the request to stop the development of the cryptocurrency.
Five Democrats from the House of Representatives sent an open letter on 2 June with a request for a moratorium, or postponement, for the development of the Libra cryptocurrency. The request for postponement is so that the US Congress and financial regulators such as the Financial Services Committee can first hold hearings on the project:
Since Facebook is already used by more than a quarter of the world’s population, it is imperative that Facebook and its partners immediately stop implementing plans until regulators and Congress have the opportunity to investigate these issues and take action.
The letter describes concerns about the potential of Libra and Facebook’s reputation regarding privacy:
It seems that these products can lend themselves to a completely new global financial system based in Switzerland and intended to match US monetary policy and the dollar. This leads to serious privacy, trade, national security and monetary policy problems not only for the more than 2 billion Facebook users, but also for investors, consumers and the global economy.
In addition, more than 30 lobby groups sent a similar open letter to Facebook yesterday . They, too, request a strike from the development of the Libra cryptocurrency until at least the hearing of Congress. According to the signatories, certain important questions about the project must first be answered:
We all believe that the risks of Facebook’s proposal are too great to allow the plan to continue with so many unanswered questions.
The first hearings in the US Congress on Libra are scheduled for July 16 and 17.
Since the unveiling of the white paper, several agencies have expressed great concern, including the Central Bank of Singapore , the Bank for International Settlements (BIS) , the French Finance Minister and the National Australia Bank .
Recently it came out that Facebook would be in conversation with one of the largest cryptocurrency exchanges in the world: Binance.