eResearch | On July 2, the U.S. House of Representatives, specifically the U.S. House Committee on Financial Services, sent a letter to Mark Zuckerberg & Sheryl Sandberg of Facebook (NASDAQ:FB) and David Marcus of Calibra, and requested that Facebook and its partners immediately agree to stop progress on Libra, the proposed cryptocurrency, and Calibra, Facebook’s proposed digital wallet.
The Committee’s concerns include:
- these products may lend themselves to an entirely new global financial system that is based out of Switzerland, could rival the U.S. dollar and affect U.S. monetary policy;
- due to the recent events with Facebook and Cambridge Analytica, it raises concerns about privacy, trading risk and national security for FB’s over 2 billion users and other participants in the global economy;
- according to the U.S. House Committee, the current information about Libra is “scant” and lacks sufficient details about the security for the potential products & services; without proper security guarantees, government regulation & oversight, these offerings could pose a threat to U.S. and global financial stability;
- users of Cailbra (the digital wallet) storing potentially billion to trillion of dollars of assets without depository insurance, could be a target for hackers;
- and, an under-regulated system could provide a platform for illicit activity and money laundering.
The U.S. House Committee intends to hold public hearings on the risks and benefits of Libra/Calibra and other cryptocurrency-based activities to explore legislative solutions. The letter asks “that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action.”
Here is a link to Congress’ Letter to Facebook..
