The spotlight turned on Facebook over the past week by the U.S. Congress over its plans for the Libra cryptocurrency has only whetted the appetite for other countries to do the same.
According to the Financial News, a British parliamentary committee has indicated that it will grill Facebook regarding its crypto project as worries grow that the social media giant’s move into payments and remittances will grant it overwhelming power.
The chairperson of the Digital, Culture, Media and Sport Committee in the House of Commons, Damian Collins, is especially suspicious of Facebook’s ambitions:
“To me, [Libra] suggests that Facebook’s almost trying to turn itself into its own country. It’s a global organization that doesn’t have physical boundaries but basically has a global community who are solely under the oversight of Mark Zuckerberg.”
Facebook’s past a stumbling block for its future
Additionally, Collins is also cynical that Facebook will be in a position to safeguard its user’s confidential financial data after a string of privacy violations in the recent past. Collins also expressed concerns that since Facebook’s payment system will exist within a ‘walled garden’ where no watchdog body will have oversight, massive fraud could occur.
The concerns raised by the House of Commons chair for the Digital, Culture, Media and Sport Committee comes less than a week since Libra’s co-creator, David Marcus, was intensely grilled by the U.S. Congress on Facebook’s crypto plans.
During the hearings, members of Congress from both sides of the political divide raised various concerns including national security and monetary policy risks that the cryptocurrency carries.
Between election interference & data breaches, Facebook has a checkered past. Now the company wants to control our money supply. Today in the Senate Banking committee, I questioned Facebook executive David Marcus on Facebook’s plan to introduce a new cryptocurrency called Libra. pic.twitter.com/x0zr5LfIPp
— John Kennedy (@SenJohnKennedy) July 16, 2019
Trump gives Libra a thumb down
Prior to Marcus’ grilling by the U.S. Congress, President Donald Trump had also weighed in indicating that if Facebook was interested in offering bank-like services then it had to apply for a banking charter.
But despite a plea by the Chairwoman of the U.S. House Financial Services Committee Maxine Waters for Facebook to commit to a moratorium which would see the Libra project put on hold until safeguards have been enacted by Congress, Marcus refused to agree to halting the plans. Instead, he only pledged that Facebook would only launch the cryptocurrency once they had got everything ‘right’.
Japan takes proactive steps for Libra
But while the U.S. has grilled Facebook and the UK is considering doing the same, Japan is already focusing on the safeguards that need to be put in place ahead of Libra’s launch. Per Japan Today, the Far East country’s Finance Ministry, the Bank of Japan and the Financial Services Agency have launched a group charged with coming up with proposals for regulating Libra.
The urgency with which Japan is approaching the matter stems from the fears that with Facebook having a global user base of nearly 3 billion people, it could upend the existing financial system. In Japan around 40 percent of the country’s population use at least one of Facebook’s services.
