Facebook has too much power to engage with a cryptocurrency, a United States senator has warned, days after the social media giant launched Libra.
Sherrod Brown, a Democratic senator from Ohio, told Bloomberg TV that the public has increasing concerns around the social network.
Facebook is too big and too powerful. I don’t know that people would have said that two or three or five years ago, but the public increasingly believes they’re too big and too powerful, particularly to engage in a risky cryptocurrency. Running a cryptocurrency system out of a Swiss bank is a big concern to people.
Brown is the latest politician to caution against Facebook’s cryptocurrency, unveiled earlier this week with collaboration from 27 other firms.
There are Rules
The senator called for more information around Libra, and to preemptively introduce rules to regulate the project. Brown described a “collective amnesia” in Washington around the global financial crisis over a decade ago. He also said that the Trump administration’s regulators look like a retreat for Wall Street executives.
We know the Trump regulators are never as aggressive aimed at big companies, whether they’re Wall Street banks or Silicon Valley, as they should be. So we want to shine light on this first of all, and then figure out what Facebook’s trying to do, and then begin to move with the regulators to protect the financial system and the economy.
Government Officials Are Acting on Libra
Brown is part of a growing chorus of representatives sounding the alarm over the world’s largest social network. With over two billion monthly active users, Facebook already commands a strong lead in social networking.
France’s finance minister, Bruno Le Maire, warned on Europe 1 radio that Libra’s status could threaten existing currencies.
It is out of the question that Libra becomes a sovereign currency. It can’t and it must not happen.
Le Maire called on the central bank governors of the G7 group to report in mid-July about Libra. The minister said that he aims to find out more about the guarantees taken from Facebook.
In the United States, the Senate Banking Committee is set to hold a hearing on the project around the same time. The Verge reports that project co-creator David Marcus will attend. The hearing will take place at 10 a.m. Eastern time on July 16.
It’s unclear how these meetings may effect the nascent project. The project’s white paper states that it plans to launch in the first half of 2020. But Maxine Waters, House Financial Services Committee Chairperson, called this week for Facebook to postpone the launch.
While the testnet is already live, it may be a while before Facebook’s grander ambitions of simplifying cross-border payments come to fruition.