Facebook’s June 18th announcement of its stablecoin cryptocurrency dubbed Libra stirred some concerns from political elites and financial juggernauts over the impending doom if the project is left unsupervised.
The head of the US House Financial Services Committee, Chairwoman Maxine Waters (D-Calif.) asked the social media giant for a moratorium on the project as the legislators and regulators assess the project’s possible impact on the financial landscape as well as the economy of the United States.
A day later, Sen. Mike Crapo (R-Idaho), who is the head of the Senate Banking Committee announced Tuesday, July 16th (next month) as the date for convening the Senate Committee in order to discuss the Libra project. On Monday, Waters published a press release which revealed that her Committee will also be holding similar talks just a day after on July 17th seeking to understand the project and its impact on the economy.
It seems both Committees will be grilling Facebook on its plans but so far the company has not revealed any witnesses that will be representing the company at these hearings. However, a report by The Hill has cited unidentified sources who said that David Marcus, the head of the Libra project will make appearances on both sessions.
“We look forward to responding to lawmakers’ questions as this process moves forward,” a spokesman from Facebook told The Hill through email.
In her request to Facebook last week, Waters stated the concerns of the regulators and legislators alike on the questionable methods that the company has used to manage user data. She said:
“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.”
Speaking to CNBC she stated that
“It’s very important for them to stop right now what they’re doing so that we can get a handle on this,” adding that “We’ve got to protect our consumers. We just can’t allow them to go to Switzerland with all of its associates and begin to compete with the dollar.” Sen. Sherrod Brown (D-Ohio), a member of the Senate Banking Committee added on Congress’s concerns saying that Libra is “a risky new cryptocurrency out of a Swiss bank account without oversight.”
Facebook plans to run its proposed cryptocurrency through a registered subsidiary established in Switzerland. The Libra Association will be comprised of 100 founding members each contributing $10 million to run a node for confirming transactions on the Libra network. So far over two dozen companies have joined the association including MasterCard, Visa, Uber, and Coinbase.