Citing ‘massive risks,’ House Democrats ask Facebook to halt its cryptocurrency plans

That’s what a group of Democrats on the House Financial Services Committee said to Facebook Inc. on Tuesday, in a letter asking the tech giant to halt plans for Libra, its cryptocurrency project.

The letter to Facebook Chief Executive Mark Zuckerberg, CFO Sheryl Sandberg and David Marcus, CEO of Facebook’s Calibra digital wallet, was signed by committee chair Maxine Waters, D-Calif., along and Reps. Carolyn Maloney, D-N.Y., Lacy Clay, D-Mo., Al Green, D-Texas, and Stephen Lynch, D-Mass.

“The scant information provided about the intent, roles, potential use, and security of the Libra and Calibra exposes the massive scale of the risks and the lack of clear regulatory protections,” the letter read. “These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past.”

“It appears that these products may lend themselves to an entirely new global financial system that is based out of Switzerland and intended to rival U.S. monetary policy and the dollar. This raises serious privacy, trading, national security, and monetary policy concerns for not only Facebook’s over 2 billion users, but also for investors, consumers, and the broader global economy,” the lawmakers said.

They called on Facebook FB, +1.04%  to hold off in implementing its Libra plans until regulators and Congress have time to hold public hearings to examine its risks and benefits, “and explore legislative solutions.”

“Failure to cease implementation before we can do so, risks a new Swiss-based financial system that is too big to fail,” they said.

Facebook unveiled its Libra plans last month, and hopes to launch it next year. The digital coin is intended to be used not just on Facebook, but around the internet, and unlike bitcoin BTCUSD, +4.88% , it will be pegged to hard currencies like the dollar and the euro to make it less prone to the wild price swings.

Facebook shares are up 49% year to date, compared to the S&P 500’s SPX, +0.29%  19% gain.

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