Facebook’s Libra cryptocurrency has undeniably caught the attention of Federal Reserve Chairman Jerome Powell. “Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability,” he said.
“These are concerns that should be thoroughly and publicly addressed,” he warned.
These comments came during a Congressional committee hearing. Rep. Maxine Waters, D-Calif., chairwoman of the House Financial Services Committee, asked Powell if Libra should be subject to regulatory oversight.
Powell said yes, but clarified that the way forward should be a “careful one, not a sprint to implementation.” Powell added that the project “cannot go forward” unless Facebook answers lawmakers’ and regulators’ questions.
“All of those things will need to be addressed very thoroughly and carefully, and in a deliberate process.”
Facebook announced Libra in June. The problem will be run by the Libra Association, a non-profit based out of Geneva, Switzerland. It is set to launch in 2020.
Facebook is not the only big-name company to be associated with Libra.
Mastercard, Spotify, Stripe, Uber, Visa and PayPal will have a hand in the running of the crypto project.
Unlike those companies, however, Facebook will be solely in charge of Calibra, the Facebook subsidiary constructing a digital wallet to store and transfer the cryptocurrency.
Many lawmakers within Congress echo the severe concerns raised by Powell.
Waters wants to see Libra shelved for the time being. She sees it as an overall trend of Facebook’s “unchecked expansion and extending its reach into the lives of its users.”
Rep. Brad Sherman, D-Calif., also was severely critical of Libra.
Sherman believes Libra has the power to “to transfer power from the United States government to sanctions and tax-evaders, terrorists, and drug dealers while reducing the importance of the U.S. dollar as the reserve and trade currency.”
Sherman has previously called to outlaw all cryptocurrencies. He believes that they represent a threat to U.S. global power.
“An awful lot of our international power stems from the fact that the dollar is the standard unit of international finance and transactions […] it is the announced purpose of the supporters of cryptocurrencies to take that power away from us.”