The head of Facebook’s cryptocurrency efforts on Wednesday vowed to engage in a “collaborative process” with U.S. lawmakers, even as leading House Democrats called on the social media giant to halt the project until regulators can assess its potential risks.
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Facebook faced immediate scrutiny last month when it formally unveiled Libra, cryptocurrency touted as a means by which the company’s base of more than two billion users can transfer value and close transactions without fees. Rather than exercise direct control over the currency, Facebook is one of several firms that will participate in the Libra Association, an independent entity based in Switzerland that will manage Libra’s operations.
David Marcus, who heads up Facebook’s newly formed cryptocurrency initiative Calibra, said that he will testify before both the Senate Banking Committee and the House Financial Services Committee in the coming weeks to address concerns about Libra. In a Facebook post, Marcus reiterated that Facebook would not directly control Libra and said Facebook supports an “open dialogue” with the public.
“We’re talking about something new, at scale in a very regulated industry, and if this is not done right, it could definitely present systemic risks no one wants,” Marcus wrote. “This is why we believe in and are committed to a collaborative process with regulators, central banks, and lawmakers to ensure that Libra helps with the kinds of issues that the existing financial system has been fighting, notably around money laundering, terrorism financing, and more.”
Libra’s launch came amid ongoing federal scrutiny of the tech industry. Regulators are said to be considering antitrust actions against Facebook, Google, Amazon and other companies. Criticism of Facebook has centered on the composition of its business, which includes the core Facebook app, Instagram and WhatsApp, as well as data privacy practices.
Earlier this week, House Financial Services Committee Maxine Waters, D-Calif., and other Democrats formally requested that Facebook place a “moratorium” on Libra until hearings can take place and proper oversight implemented.
“If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger U.S. and global financial stability. These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past,” Waters and other House Democrats said in a letter.