Cryptocurrency

Democrats call for immediate halt to Facebook’s cryptocurrency, citi…

Democrats call for immediate halt to Facebook's cryptocurrency, citi…

Facebook CEO Mark Zuckerberg is leaping into the world of cryptocurrency with Libra, designed to let people save, send or spend money as easily as firing off text messages

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AFP/Getty Images
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Lawmakers say Libra and Calibra digital wallet may expose people to ‘serious privacy and national security concerns, cyber security risks’

US lawmakers have called for an immediate halt to Facebook’s cryptocurrency project Libra.

Democrats on the House Financial Services Committee wrote a letter to Facebook CEO Mark Zuckerberg and other executives outlining concerns about the risks Libra and its digital wallet Calibra may pose to the current financial system.

The group requested that development of Libra and Calibra, which are set to launch next year, should be postponed until regulators are able to fully investigate the risks involved.

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“If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger US and global financial stability,” wrote committee chairwoman Maxine Waters.

“These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past.”

Democrats call for immediate halt to Facebook's cryptocurrency, citi…

The letter went on to claim investors and consumers transacting in Libra may be exposed to “serious privacy and national security concerns, cyber security risks, and trading risks”, while those using Calibra could become “unique targets for hackers”.

The group of lawmakers had previously hinted that it would call for an investigation into Facebook’s new cryptocurrency, which is backed by 27 other companies – including PayPal, Mastercard and Visa.

Facebook claims that one of the reasons it announced Libra so far ahead of its official launch was to address any concerns that may arise.

“We look forward to responding to policy makers’ questions as this process moves forward,” a company spokesperson told .

Democrats call for immediate halt to Facebook's cryptocurrency, citi…

Libra describes itself as a ‘simple global currency and financial infrastructure that can empower billions of people’ (Libra/ iStock/ The Independent)

Once launched, the Libra cryptocurrency would allow users of Facebook apps like Messenger and WhatsApp to spend and receive digital tokens.

The technology giant claims that with more than 2 billion users around the world, Libra and Calibra will offer vital financial services to those who aren’t currently served by traditional banks and financial organisations.

Yet beyond the concerns of the House Democrats, other officials have also raised concerns about how it will be used.

Last month, France’s Finance Minister Bruno Le Maire said Libra must face strict regulation to prevent it being used as a tool for money laundering and financing terrorists.

Mr Le Maire told Europe 1 radio that it was “out of the question” that Libra be allowed to become a sovereign currency. “It can’t and it must not happen,” he said.

Others, such as cryptocurrency expert Phil Chen, have warned that Libra could be used to further extend Facebook’s access to people’s personal data.

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