Facebook will be presenting testimony for its newly announced Libra cryptocurrency project to the Banking Committee of the United States Senate on July 16, as reported by economic news site MarketWatch on June 19.
After months of contemplation, the social media giant released the white paper for its Libra token yesterday. Notably, the stablecoin will operate on a native blockchain also dubbed as Libra and will be backed by a basket of reserve assets “designed to give it intrinsic value” and mitigate volatility fluctuations.
Soon after the release, the U.S. regulators expressed their concern over the possible effects of the project on financial stability. The chairwoman of the United States House of Representatives’ Financial Services Committee, Rep. Maxine Waters demanded Facebook to halt the project’s development while the regulators investigate the project:
“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.”
The Banking Committee will reportedly hold a hearing on July 16, entitled “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations.” The head of the U.S. Federal Reserve, Jerome Powell, disclosed during an interest rate speech on Wednesday that the social media giant did consult regulators prior to the project:
“[Facebook] has made quite broad rounds around the world with regulators, supervisors and lots of people to discuss their plans and that certainly includes us.”
Looking at the widespread reach of Facebook, government officials in other countries also express their doubts and concerns regarding the project. As per a report, the governor of the French central bank, Francois Villeroy de Galhau hints about a crypto task force, headed by European Central Bank board member Benoit Coeure. The”http://kryptomoney.com/g7-plans-a-task-force-to-manage-facebooks-libra-cryptocurrency/” target=”_blank” rel=”noopener noreferrer”> task force within the Group of Seven (G7) nations would look over the cryptocurrency regulators in order to avoid money laundering and other problems.
Though Facebook’s Libra might not be the main reason behind the task force, France’s finance minister, Bruno Le Maire did express concerns on Tuesday, the Libra could gain traction and replace traditional currencies.
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