Facebook Libra Crypto Launch Faces Strong Backlash from Lawmakers

The launch of Facebook’s native cryptocurrency Libra on Tuesday, June 18 created a huge buzz in the crypto space. Facebook through the release of its Libra whitepaper has made it clear that it wants to play a game-changer role in the payment industry by leveraging the power of cryptocurrency and blockchain.

Besides, the social media giant has received huge backing from some of the most prominent business organizations who will be serving as the “Founding Members” of the Libra blockchain network.

But things are certainly not going to be very easy for Facebook as they may seem to be. The U.S. lawmakers and banking senate have expressed concerns over Facebook’s Libra launch citing the shady past of the social media giant when it comes to handling user data and privacy matters.

Rep. Maxine Waters, chairwoman of the United States House of Representatives’ Financial Services Committee wants Facebook to apply some breaks to its Libra developments. As reported by CNN Tech reporter, Brian Fung, Rep. Waters said: “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”.

After this sharp attack, another representative from the Financial Services Committee - Patrick McHenry - laid out a much-balanced approach to deal with the Libra launch. Rep. McHenry said: “It is incumbent upon us as policymakers to understand Project Libra. We need to go beyond the rumors and speculations and provide a forum to assess this project and its potential unprecedented impact on the global financial system.”

On the other hand, the US Senate Banking Committee has said that they would be holding a hearing next month on Facebook’s new crypto initiative. Dubbed as “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations,” the hearing will take place next month on July 16.

A source familiar with the matter said that Facebook’s currency head at blockchain, David Marcus is most likely to testify at the hearing. According to Reuters, the members of the Senate Banking Committee already approached Facebook to explain its developments about Libra. Facebook has said that it shall be answering all the concerns raised by the lawmakers during the hearing next month.

Not only in the U.S. but even France’s Finance Minister has warned against the use of Libra for illicit activities while offering a safe haven for terrorist activities. In another report from TechCrunch, it has been understood that Facebook’s Calibre wallet won’t be available in some of its largest markets like India owing to regulatory restrictions.

A Facebook spokesperson told the publication: “The libra blockchain will be global, but it will be up to custodial wallet providers to determine where they will and will not operate. Calibra won’t be available in U.S.-sanctioned countries or countries that ban cryptocurrencies.”