By
Godfrey Benjamin
April 12th, 2024
The chairwoman of the House Financial Services Committee Maxine Waters announced that the panel will hold the second hearing next month on Facebook’s plan to develop a cryptocurrency-based payments platform Libra.
The U.S. House Financial Services Committee will host a second hearing on Facebook’s Libra cryptocurrency on July 17th after the Senate Banking Committee holds its previously announced hearing.
Maxine Waters, chair of the powerful House committee, announced the hearing Monday after she called on Facebook to suspend development of their project. For now, there is no witness list that yet has been released. Last week she said:
“It’s very important for them to stop right now what they’re doing so that we can get a handle on this. We’ve got to protect our consumers. We just can’t allow them to go to Switzerland with all of its associates and begin to compete with the dollar.”
She also requested, given the company’s troubled past, that Facebook agrees 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.
In her public statement, Waters also commented on the lack of concrete regulation in the cryptocurrency market and said that regulators should look at Facebook’s plans for Libra 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.”
Just for reminder, last week, France’s central Governor Francois Villeroy de Galhau announced creating a G7 task force to study how central banks ensure cryptocurrencies like Facebook’s Libra are governed by regulations ranging from money-laundering laws to consumer-protection rules.
Co-creator and leader of Project Libra, David Marcus, will testify at the hearings even though a Facebook’s spokesman declined to confirm who would attend the hearing per se. He said:
“One of the reasons for creating Calibra was to have a dedicated, regulated entity that will make strong privacy commitments to its customers as we’ve heard loud and clear that you don’t want social and financial data commingled. We understand we will have to earn your trust.”
The company’s response to the hearing was that they are looking forward to “responding to lawmakers” questions as this process moves forward.
Even though Marcus tried to make clear that privacy is of big importance to them, there are still some doubts especially about it posing some risks to the banks. That’s why Waters’ calling seems legit in a way. The truth is, regulators around the world will need to coordinate to ensure a level playing field between big techs and banks.