Facebook should put a stop to Libra until further notice, says Congress

In a development that can have repercussions on Facebook’s plan to introduce its own Cryptocurrency Libra, the United States Congress has said that the company should stop work on Libra for now. It is a formal request from Congress that says Facebook should impose a moratorium on its Cryptocurrency till the time that its implications are fully examined. Hearings have been scheduled in the House of Representatives and the Senate on 16 and 17 July. Facebook will be represented by David Marcus in these hearings and he will answer the questions of the lawmakers.

Facebooksupport to Libra has raised alarm bells in the government circles. Facebook covers a fourth of the humanity at present and this grand initiative has the potential to undermine the global financial ecosystem, feel the lawmakers. These lawmakers have lots of questions and fears in the minds and this is the reason they have written formal letters to not only Facebook but also to Calibra, the company that is working on Libra digital wallet. Government is fearful that Libra might start competing with the U.S dollar in future. This is the reason why the government has asked Facebook to impose a moratorium on its Cryptocurrency Libra for now.

If one goes by the contents of the letter, it becomes clear that the government is worried about many aspects of online Facebook support to Libra. These fears pertain to trading, privacy, monetary policy, and national security as Facebook has a direct reach to nearly 2 billion people around the world. Government feels that Libra can have far reaching consequences on not just the common people but also on investors, and in general the global economy.

The Committee on Financial Services of the House of Representatives, set up to look into the proposed Cryptocurrency Libra of Facebook,  is not satisfied with the 29 page white paper on Libra published by Facebook. The Chairperson of this committee, Maxine Waters has raised concerned on cyber security implications of Libra. She said that the committee needs time to understand the full implications of Libra. This is why the committee sent formal letters to Facebook and Calibra, asking them to sop further work on this proposed Cryptocurrency.  Waters feels that if Libra, and products and services similar to it are allowed to function without sufficient regulations, they have the potential to undermine U.S and global financial security.

In a post on 3 July, David Marcus wrote that Facebook does not propose to control Libra and it is in face relinquishing its control. He clearly said that Facebook will not control either the currency or the network. It will only be one of the hundreds of members of Libra Association. There will not be any special rights or privileges for Facebook as far as Libra is concerned. 

He also added that even though Calibra is a subsidiary of Facebook, it will not have access to the financial data of Calibra. As such, people using Libra do not need to post their trust in Facebook. It will be interesting to see what transpires during the hearings on 16 and 17 of July.

This post was first published on:- http://allaboutinternet.home.blog/2019/07/09/facebook-should-stop-working-on-its-cryptocurrency-libra-says-congress/