Facebook has recently announced that it will be launching its own digital currency, called Libra, which will allow the users to make financial transactions all over the world. In a nutshell, Libra, according to Facebook, aims to connect the people who don’t have access to regular banking platforms.
Everyone would be able to make Libra transactions via a dedicated app but also on WhatsApp and Facebook Messenger, as early as 2020. The users will be able to send money to each other and pay for goods or services by using Libra instead of the currency in use where they are at that time or the country they live in.
Facebeook says that, by using this system, millions of people who cannot have bank accounts but can access mobile phones, will be able to send money from anywhere in the world seamlessly.
Will it shake up the traditional banking system to the core? Definitely.
But that’s not the only issue people have with Libra.
Facebook is already dealing with a solid number of privacy scandals and it’s also facing a potential $5 billion fine from the U.S Federal Trade Commission following the Cambridge Analytica scandal.
Literal hours after Facebook made the announcement, the privacy concerns were at the forefront of most of the talks the announcement generated and U.S lawmakers were quick to follow suit.
Rep. Patrick McHenry wrote to Congresswoman and Chair of the House Financial Services Committee, Maxine Waters, soon after Facebook’s announcement requesting a hearing to discuss the company’s initiative.
“We know there are many open questions as to the scope and scale of the project and how it will conform to our global financial regulatory framework,” McHenry wrote in the letter. “It is incumbent upon us as policymakers to understand Project Libra. We need to go beyond the rumors and speculations and provide a forum to assess this project and its potential unprecedented impact on the global financial system.”
Waters was swift to respond and asked Facebook to halt all of its plans concerning Libra until both the Congress and the regulators would be able to perform a thorough review.
“Facebook has data on billions of people and has repeatedly shown a disregard for the protection and careful use of this data,” Waters said in a statement to the press. “With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users.”
It is unknown at this time when the Libra hearing will take place but, according to Water, the Facebook executives are expected to testify before the committee on the situation.