Consumer body challenges US lawmakers over Facebook crypto
A consumer advocacy group has challenged US lawmakers over their threats on Facebook’s new crypto-currency, Libra.
This, after Facebook was summoned to appear before the US Senate Banking Committee over its plans to launch a crypto-currency next year.
On Tuesday, the social media doyen shared plans for Calibra, a newly formed Facebook subsidiary, whose goal is to provide financial services that will let people access and participate in the Libra network.
Just hours after Facebook announced its new Libra crypto-currency project, US federal lawmakers issued warnings to the social media platform, requesting the project be put on ice until lawmakers have had a chance to review it.
Reuters reports that Facebook will face scrutiny from the US Senate Banking Committee on 16 July.
It adds that David Marcus, who oversees Facebook’s blockchain efforts, is expected to testify.
The hearing will explore the Libra project as well as any data privacy considerations it may raise, the committee said.
The lawmakers issuing warnings about Facebook’s crypto project were Maxime Waters, chair of the House Financial Services Committee, as well as ranking member Patrick McHenry. Mark Warner and Sherrod Brown both stated independently that Congress “cannot allow” such a project.
“Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a crypto-currency until Congress and regulators have the opportunity to examine these issues and take action,” Waters said in a statement.
In response, consumer advocacy group Consumer Choice Centre’s deputy director Yaël Ossowski says the lawmakers’ threats are harmful to consumer choice, and will ultimately backfire.
“Overseeing regulation on Internet and financial firms is important, but the ‘regulate first, innovate later’ mentality that came in response to Libra should give every Internet user pause. If every new Internet innovation is now subject to kneejerk congressional approval, that sets a dangerous precedent for the future of consumer choice online,” says Ossowski.
“Consumers have the right to choose if they want to use crypto-currencies or social networks, and are aware of the great risks and benefits that go along with that. People want an alternative and they’re interested in new digital tools online. That’s why there is so much interest.”
He notes allowing political figures to freeze future innovations and projects because of temporary partisan politics will keep millions of consumers from being able to enjoy regular goods and services they enjoy online, not to mention being able to connect with thousands of their friends and family online.
“And it won’t stop here. If these threats continue, Bitcoin and dozens of other crypto-currencies, as well as other social media platforms that millions of users have adopted, will also face well-intended but flawed regulation.
“We must have smart regulation that encourages competition, protects privacy and ensures consumer choice. Prior restraint of innovation would be the opposite of that,” Ossowski concludes.