Representative Patrick McHenry, the top Republican on the financial services panel, wants Waters to hold a hearing. He said Congress needs 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.”
Particular concerns lawmakers have had about digital currencies include the risk that consumers’ coins might be stolen and the potential for money laundering.
David Marcus, the Facebook executive leading the company’s cryptocurrency
and blockchain efforts, told Bloomberg last week that he has been in touch with regulators and central banks in multiple countries. “We really wanted to make them stakeholders early on in the process and get their feedback early on,” he said.
In response to criticism Tuesday from US lawmakers, a Facebook spokeswoman said: “We look forward to responding to lawmakers’ questions as this process moves forward.”
Facebook intends to launch its coin in 2020. Senator Mark Warner, a Virginia Democrat, said he was concerned the company appears to be using its corporate heft to move into and try to dominate new industries.
Senator Sherrod Brown, the top Democrat on the Senate Banking Committee, made a point that was common in lawmakers’ statements: regulators must make sure Facebook users are protected. But like others, he didn’t identify a particular watchdog, perhaps signaling uncertainty over who might police Libra.
The Securities and Exchange Commission typically steps in when companies
raise money by selling ownership stakes in an asset likes shares. The Commodity Futures Trading Commission has oversight of trading in futures and derivatives but not underlying digital tokens. States and banking regulators like the Federal Reserve could potentially have a role in regulating Libra.
The Wall Street Journal reported Tuesday that Facebook said a Libra subsidiary that will create crypto wallets that can be used to pay for items will be regulated. Facebook didn’t say which agency will have jurisdiction.