Sunday, November 1, 2020

US Watchdog Groups Call for Congress to Put a Freeze on Facebook’s Libra


A group of North American privacy and consumer watchdogs is asking the U.S. Congress to halt Facebook‘s Libra project.

In a letter posted by Public Citizen, the group details a list of issues they have with Facebook’s cryptocurrency. The more than 30 signers include the Center for Digital Democracy, Consumer Reports, and the Service Employees International Union.

“We call on Congress and regulators to impose a moratorium on Facebook’s Libra and related plans until the profound questions raised by the proposal are addressed,” they write, echoing similar demands by House Financial Services Committee Chair Maxine Waters. Her panel and its Senate counterpart are scheduled to hold hearings on Libra this month.

Primarily liberal-leaning, these groups are concerned with the effect Libra will have on the world economy, especially in the lives of the unbanked. The signers are also concerned with the currency’s governance and its effect on national sovereignty, asking questions like “What impact might Libra have on monetary policy in smaller and developing countries?”

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The questions, though thorough, suggest the writers are unaware of the extent to which cryptocurrency business already comply with know-your-customer (KYC) and anti-money-laundering (AML) regulations.

For example, the group asks:

“Wouldn’t Libra provide an easy mechanism for money laundering? Would the Libra Association apply the anti-money laundering rules imposed by many nations? Would its technology even permit ‘know your customer’ type standards? Will all wallet providers be required to adhere to such rules? Should a private association be in the business of applying such standards?”

“We have too much recent experience with insufficiently regulated financial markets spinning out of control to let this happen again,” the consumer groups add, likely referring to the 2008 crash. “The Facebook proposal must be put on hold until these numerous and fundamental questions are resolved.”

Obviously, this is not a binding document, but that these groups – and their associated constituencies – are concerning themselves with Libra shows just how far Facebook’s tendrils are reaching into daily life.

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