After officially announcing Libra on Tuesday, Facebook has attracted the attention of policymakers in the United States, but not in a good way.
Multiple US senators, from both the Republican and Democratic party, have raised concerns regarding the digital currency of the social media company. Democratic Representative Maxine Waters, chair of the House Financial Services Committee (HFSC), even requested the tech giant to halt its development of Libra.
“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,” Waters wrote in an official statement after the announcement of Libra.
Republican Representative Patrick McHenry also raised concerns over the impact of Facebook’s digital currency on the economy and noted: “While there is great promise for this new technology in fostering financial inclusion and faster payments, particularly in the developing world, we know there are many open questions as to the scope and scale of the project and how it will conform to our global financial regulatory framework.”
“We need to go beyond the rumors and speculations and provide a forum to assess this project and its potential unprecedented impact on the financial system.”
Past mishap with private data
Apart from concerns over the impact crypto economy on the financial stability of the country, many politicians are also pointing out Facebook’s troubled past with data privacy.
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Last year, Facebook’s data policies came into question when Cambridge Analytica, a data analytics company, harvested the private data of millions of Facebook users and manipulated it for the purpose of political profiling.
Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight. https://t.co/IjZOFNai3r
— Sherrod Brown (@SenSherrodBrown) June 18, 2019
“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,” Senator Mark Warner said.
The social media company also faced a similar response from lawmakers and regulators, Finance Magnates reported yesterday.
Though the Menlo Park-headquartered firm park did not release any official statement on the concerns of the lawmakers on Libra, a spokesperson of the company told CNBC: “We look forward to responding to lawmakers’ questions as this process moves forward.”