U.S. Lawmakers And European Regulators Against Facebook’s Libra Project

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Less than 24 hours ago, Facebook released the white paper for the Libra Project, which detailed information about the upcoming cryptocurrency. Even though the news was received with excitement from many community members, governments, regulators and congressmen were not so happy to hear about Facebook’s cryptocurrency.

In Europe, the French Minister, Bruno Le Maire, and the German member of the European Parliament, Marklus Ferber, immediately called for tighter regulations against the social media giant.

According to Mr. Le Maire, Libra shouldn’t be seen as a replacement for traditional currencies claiming:

It is out of question… It can’t and it must not happen.

Additionally, Le Maire called on the Group of Seven central bank governors, guardians of the global monetary system, to begin studying Facebook’s Libra project; especially to study concerns regarding privacy, money laundering and terrorism finance.

Mark Carney the Bank of England Governor, also commented on this matter claiming that the Libra project would have to be subjected to the highest standards in order to work properly. Mr. Carney advised people to keep an open mind about technology that can facilitate cross-border money transfers. Unfortunately, Markus Ferber, a German member of the European Parliament seems to think different, saying he believes Facebook could become a shadow bank, advising regulators to remain on high alert.

U.S. lawmakers were also quick to respond with the head of the U.S. House of Representatives Financial Services Committee, Congresswoman Maxine Waters, asking to halt development of the Libra Network until hearings can be held in regards to this matter.

In a public statement, Waters said:

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… there’s no clear regulatory framework to provide strong protections for investors, consumers and the economy when it comes to cryptocurrencies.

Senator Sherrod Brown also commented on Twitter claiming Facebook has exploited user data in the past, which was why regulators couldn’t allow the company to run a risky new cryptocurrency out of a Swiss bank without oversight.

It appears governments are reluctant to Facebook creating a new cryptocurrency to facilitate payments, perhaps because it could disturb finances internally, or simply because they just don’t understand how the technology works. Either way, the Libra cryptocurrency will become a reality in 2020.

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