WASHINGTON — Top Democratic and Republican leaders of the House Financial Services Committee called Tuesday for Facebook to appear before Congress to testify on its cryptocurrency plans.
The social media giant said Tuesday it will offer its own cryptocurrency, called Project Libra, which it could use to build an alternative financial system that targets the unbanked.
But members of both political parties appeared skeptical of the effort, with Financial Services Committee Chairwoman Maxine Waters demanding that Facebook halt its plans while Congress looks into the matter.
“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,” the California Democrat said in a press release.
Rep. Patrick McHenry, the top GOP member of the panel, didn’t go quite that far, but endorsed the call for hearings.
“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,” McHenry wrote in a letter to Waters asking for hearings. “It is incumbent upon us as policymakers to understand Project Libra.”
Waters suggested Facebook’s data privacy scandals make it a poor choice to launch a worldwide financial network.
“Facebook has data on billions of people and has repeatedly shown a disregard for the protection and careful use of this data,” she said. “It has also exposed Americans to malicious and fake accounts from bad actors, including Russian intelligence and transnational traffickers. Facebook has also been fined large sums and remains under a Federal Trade Commission consent order for deceiving consumers and failing to keep consumer data private, and has also been sued by the government for violating fair housing laws on its advertising platform.”
The announcement is likely to further calls for regulatory oversight of the crypto market, with Waters calling it a “wake-up call” for federal agencies.
“The cryptocurrency market currently lacks a clear regulatory framework to provide strong protections for investors, consumers, and the economy,” she said. “Regulators should see this as a wake-up call to get serious about the privacy and national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies.”
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