Facebook's launch of Libra-cryptocurrency faces significant pushback from federal officials who have raised concerns about the possibility of being used to cut money laundering and fund other illegal activities.
House Democrats in the House Financial Services Committee have already circulated draft legislation aimed at preventing US technology companies with an annual turnover of $ 25 billion from the issuance of digital currencies and finer ones making it up to $ 1 million per day. The bill, which would effectively ban Facebook from acting like a financial institution, is called "Keep the Big Tech Out of Finance Act."
As many outlets have reported, the draft legislation partially reads: "A large platform tool cannot establish, maintain or operate a digital resource that is intended to be widely used as a means of exchange, billing, value or other similar function, as defined by Federal Reserve System Board
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Democrats are not alone in the face of Facebook's plans Last year, President Trump signaled that he was also not a fan, tweeting that Libra will "I'm not a fan of Bitcoin and other Cryptocurrencies, which is not money and whose value is very volatile and based on thin air," he said.
At a Monday conference, Trump's finance minister, Steven Mnuchin, was framed as a matter of national security and said he was not "comfortable" with Facebook's plan today . The Secretary continued to say that his department has raised "very serious concerns" that Libra can be used to activate crimes of launderers and terrorist finance.
"Cryptocurrencies like Bitcoin have been exploited to support billions of dollars of illegal activity such as cybercrime, tax evasion, extortion, ransomware, illegal drugs and human trafficking," Mnuchin says. "Many players have tried to use cryptocurrencies to fund their malignant behavior. "
David Marcus, Facebook's Supreme Official Supervisor of the Libra Project, is set to testify to the Senate Bank Committee on Tuesday and before the House Financial Services Committee on Wednesday.
In their prepared comments, which Facebook released on Monday, Marcus stated that Libra and Facebook's digital wallet, known as Calibra, will be in full compliance with the regulations of the Treasury's Financial Crimes Enforcement Network (FinCEN) and will unite the Banking Law and other federal laws.
"Status quo does not work for many; It's too expensive for people around the world to spend and transfer their money, "he said." We think Libra can offer a more efficient, affordable and secure alternative. "He also says he expects Libra to be regulated by the Swiss Federal Data Protection and Information Commissioner
Libra is run by an ideal base in Geneva with 28 founding companies, of which Facebook is just one, others include Ebay, Uber, Lift, Visa, Paypal and Mastercard, but according to the New York Times even Facebooks high-profile partners doubt Libra's viability, and many of them are as curious as we are about how everything is going to go out.