Facebook defends LIbra after US lawmakers call for a moratorium

Facebook defends LIbra after US lawmakers call for a moratorium

Libra, the cryptocurrency of social media giants, announced that two weeks later, Facebook and US lawmakers had a disagreement about the potential dangers of the plan.

On Tuesday, the California-based company received a letter from the House Financial Services Committee, Congresswoman Maxine Waters, and four House Democrats asking the company to suspend the project and give regulators more time to come. Assess the potential risks of Libra.

In the letter, lawmakers wrote: "Because Facebook already has more than a quarter of the world's population, Facebook and its partners must immediately stop implementing the plan before regulators and Congress have the opportunity to investigate and take action."

They also warned that Libra and other cryptocurrencies could jeopardize the global financial system.

The letter said: "If such products and services are not properly regulated and adequately supervised, it may cause systemic risks that threaten US and global financial stability."

David Marcus, head of the Facebook blockchain team, reiterated in a blog post on Wednesday that the company would not control the exchange rate.

He wrote that Facebook was only one of the more than 100 members of the Libra Association at the time of its establishment and would not have any special rights or privileges.

In response to questions about whether Facebook can be trusted to manage financial services, Marcus writes: "The bottom line is: you don't have to trust Facebook to benefit from Libra."

He also explained that Facebook's wallet called Calibra developed for Libra is just one of many digital wallets based on the platform, and the social media giant will not see Calibra's financial data.

Since Cambridge Analytica's intervention in the 2016 presidential election was exposed, people generally distrusted Facebook and criticized it for mishandling user data. Many lawmakers are cautious about Facebook's access to sensitive data through Libra, such as people's financial situation.

The Senate Banking Committee will hold a hearing on Libra on July 16th, and the House Financial Services Committee will hold its first hearing on the cryptocurrency on July 17.

Facebook confirmed that Marcus will testify at two hearings.

A Facebook spokesperson said: "We look forward to working with parliamentarians in this process, including answering their questions at the forthcoming House Financial Services and Senate Banking Committee hearings."

Marcus also mentioned other issues in his blog, including the feasibility of Libra to solve the problem of bank shortages, which Facebook called the goal of the project.

But this may not be enough to alleviate the concerns of parliamentarians and observers. Libra's white papers and supporting documents released two weeks ago by Facebook were immediately challenged and resisted from all over the world.

Stephen Grenville, former deputy governor of the Reserve Bank of Australia, wrote in a column for the Nikkei Asia Review: “Libra may bring significant financial instability to emerging economies, especially in Asia, where The degree of openness of global financial flows is mostly higher than that of Africa or Latin America." (Chain to Finance)