US warns Facebook against misusing its cryptocurrency

Facebook last month revealed its plans to launch “Libra” in early 2020, which will enable millions of unbanked people to integrate into the financial system from their phones.

U.S. Treasury Secretary Steven Mnuchin on Monday (07.15.2019) expressed his “grave concerns” about Facebook’s “Libra” cryptocurrency, warning of its possible “speculative” nature and its potential “for money laundering”.

“The Treasury is seriously concerned that Libra could be misused for money laundering,” he said, adding that Facebook “has a lot of work to do to convince” governments that it can launch a cryptocurrency and reach very high levels “before it enters the financial system.” Level”. “Whether they’re banks or not, they’re all under the same regulatory framework,” Mnuchin told reporters at the White House.

The huge potential of this cryptocurrency has had the basis of a social network (2.38 billion users worldwide) from the very beginning, attracting the attention of domestic and foreign regulators.

Libra Association

Facebook and the 27 other organizations that make up the Libra Association (including Visa, Mastercard, Uber, Lyft, PayPal, eBay, Vodafone, and Spotify) officially announced in June that the cryptocurrency will be created by 2020 and will be integrated into WhatsApp and Messenger.

Libra will not be directly dependent on Mark Zuckerberg’s company, but will be governed by the association, which will be headquartered in Geneva (Switzerland), and its value will be backed by a basket of underlying assets consisting of bank deposits and various sovereign debt compositions. nation.

Congress holds hearing on Libra project

Mnuchin’s comments reflect concerns expressed by Federal Reserve Chairman Jerome Powell, the rest of the world and lawmakers, who this week began a series of congressional hearings on Facebook’s Libra project.

David Marcus, who oversees digital wallets and blockchain technology at Facebook, will tell a congressional hearing on Tuesday that he wants regulators to conduct a thorough scrutiny of the Libra project.

According to testimony prepared and presented by the Senate Finance Committee, Marcus will say: “The time between now and the (cryptocurrency) launch is designated as an open process, subject to regulatory oversight and scrutiny.”

Facebook last month revealed its plans to launch “Libra” in early 2020, which will enable millions of unbanked people to integrate into the financial system from their phones.