Even though cryptocurrency has seen a lot of use in the last decade, it wasn’t 2019 that it really saw attention from US regulators and this was thanks to Facebook launching the whitepaper for their upcoming Libra token. The Libra token is on track to revolutionize cryptocurrency because, upon its launch, it will be one of the most used tokens in the world and has brought the conversation of cryptocurrency to the forefront of both regulatory systems and the mainstream financial world.
As soon as the white paper was released, Facebook was summoned to US congress to explain the implications of the token as well as how the security of user data will be handled. The hearing was a mixed bag in that some were convinced of its worth while several US senators did not support the token being launched. Even though the hearing has since concluded and Facebook has met with world leaders in the last few months, it has been announced on August 23, 2019, that the United States House of Representatives Financial Services Committee will continue to review Libra as per their priorities for fall 2019.
Libra Under Review
The announcement was made by representative Maxine Waters, who is the chair of the Financial Services Committee and according to the official statement, the Committee will receive testimony and opinions from government officials as well as other regulators. A number of individuals were specifically mentioned such as Treasury Secretary Mnuchin, Consumer Financial Protection Bureau Director Kraninger, Federal Housing Finance Agency Director Calabria and Federal Reserve Vice Chairman Quarles.
Representative Waters has been particularly critical of the Libra token in the past and has suggested that development needs to be halted until more information can be ascertained about it. Back in July, she stated that Facebook has shown a pattern of failing to keep user data private in reference to the Cambridge Analytica scandal as well as the influence of Russian state actors on the 2016 US Presidential elections.
“Given the company’s troubled past, I am requesting that Facebook agree 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,” she said.
While Senator Waters has been critical of Libra, treasury secretary Mmnuchin has been anti-crypto in general stating in July 2019 the cryptocurrencies have been exploited for the use of illicit activities such as cybercrime and tax evasion.