U.S. Lawmakers Ask Facebook to Halt Its Cryptocurrency Project Citing 'Massive Risks'

Five members of the U.S. Congress have recently sent an open letter to Facebook’s founder and chief operating officer, Mark Zuckerberg and Sheryl Sandberg, asking them to halt the company’s cryptocurrency project Calibra, citing “massive risks.”

According to Forbes, the five members of Congress were led by Congresswoman and chair of the House Financial Services Committee, Maxine Waters, and argued regulators need to look into Facebook’s Libra cryptocurrency, so they can examine trading, national security, monetary policy, and privacy concerns.

Per the document, Libra could lead to an “entirely new global financial system that is based out of Switzerland and intended to rival US monetary policy and the dollar.” It added Facebook hasn’t added too many details on its plans regarding the cryptocurrency project, and that products and services like these could “pose systemic risks that endanger US and global financial stability” if left unchecked.

The letter reads:

These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past. Indeed, regulators around the globe have already expressed similar concerns, illustrating the need for robust oversight.

The letter comes as a follow-up to a statement Waters released last month, that called on Facebook to pause its cryptocurrency project. At the time, Waters claimed that given Facebook’s “troubled past” the company should 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.”

The Congresswoman is also set to have a committee hearing on July 16 and 17, called “Examining Facebook’s Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System.” In it, the social media giant’s cryptocurrency and its potential impact will be discussed.

Facebook, as CryptoGlobe covered, announced the upcoming launch of its cryptocurrency in June of this year. The cryptocurrency is set to launch in 2020, and a testnet of its blockchain is reportedly already being experimented with.

The cryptocurrency will reportedly be used to purchase products, for cross-border payments, and to make donations. The social media giant has 27 partners – including Visa, MasterCard, and PayPal – working with it.

Lawmakers in the U.S. aren’t the only ones concerned about the social media giant’s project. France, for example, has urged the G7 to establish a task force to research the potential negative impacts of a large, multinational company like Facebook launching its own cryptocurrency.