Facebook’s proposed cryptocurrency faced strong political headwinds from U.S. lawmakers.
Democratic Rep. Maxine Waters, chair of the House Financial Services Committee, demanded Facebook stop development of Libra, the cryptocurrency the company unveiled on Tuesday.
“Given the company’s troubled past, I am requesting that Facebook 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,” Waters said in a statement.
Facebook and a consortium of partners plan to launch Libra in 2020. It is an open-source digital currency that people will be able to use to transfer money to peers or merchants over the internet. Facebook is also introducing a digital wallet, Calibra, for users to store and exchange the currency.
Rep. Patrick McHenry, the ranking Republican on the committee, asked Waters to call the hearing earlier in the day.
“While there is great promise for this new technology in fostering financial inclusion and faster payments, particularly in the developing world, we know there are many open questions as to the scope and scale of the project and how it will conform to our global financial regulatory framework,” McHenry wrote. “We need to go beyond the rumors and speculations and provide a forum to assess this project and its potential unprecedented impact on the financial system.”
Senator Sherrod Brown, a Democrat, also expressed skepticism, tweeting “We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight.”
Sen. Mark Warner, a Democrat, echoed the sentiment, saying Facebook is a company that has lost Americans’ trust in its ability to keep their data private. “The idea that we are going to turn over our financial data and information to that company, I think they have a big uphill effort to try to convince Americans that they ought to trust in Facebook’s proprietary interest in keeping your data secret,” Warner said.
A Facebook spokesperson told CNBC, “We look forward to responding to lawmakers’ questions as this process moves forward.”