Facebook’s crypto project Libra has turned the cryptocurrency industry upside down ever since the moment it was unveiled back in June. A lack of compliance with the vast majority of financial regulators across the planet has somewhat halted its progress, and watchdogs are still not sure how to act and react towards the newly announced ecosystem.
American legislators, led by Representative Maxine Waters, recently traveled all the way to Switzerland for meetings with the European nation’s financial regulators. However, the US-based lawmakers remain highly concerned about Libra and Facebook’s potential privacy risks for users.
The Official Position
An official release from Chairwoman Waters that was published in the last few hours informed that multiple members of the U.S. House of Representatives Financial Services Committee met with several regulatory agencies and lawmakers in Switzerland. Among them were the State Secretariat for International Financial Matters, the Federal Data Protection and Information Commissioner, and the Financial Market Supervisory Authority.
American representatives wanted to know specifically how several local authorities were going to approach Libra’s regulation. They also wanted to learn a bit more about the project, its current state, and its magnitude. Waters described the meetings as helpful, but she did not come with good news from a concerns standpoint.
“Last month, the House Financial Services Committee held a hearing to examine Facebook’s proposed cryptocurrency, Libra, and its impact on consumers, investors, national security, and the American financial system. As I said then, that hearing was just the first step in our oversight and legislative process. Today, my colleagues and I are departing Switzerland after meeting with the government officials that Facebook claims would regulate the Swiss-headquartered Libra Association, which will issue and manage the Libra currency. Our discussions with representatives from the State Secretariat for International Financial Matters (SIF), the Federal Data Protection and Information Commissioner (FDPIC), the Financial Market Supervisory Authority (FINMA), and Swiss legislators were helpful in understanding the status, complexity, and magnitude of Facebook’s plans,” her statement started.
The chairwoman explained that “while I appreciate the time that the Swiss government officials took to meet with us, my concerns remain with allowing a large tech company to create a privately controlled, alternative global currency.”
David Marcus, one of the heads of the Libra project and the Calibra wallet, lead several congressional hearings back in July to defend Facebook’s newest venture, without much success in terms of convincing lawmakers that it did not represent a severe privacy risk for users around the world.
Marcus stated at the time that Switzerland and the Libra project could match very well from a regulatory point of view. American legislators, however, did not buy those remarks and made their concerns public.
Using Switzerland as a Shield?
In fact, lawmakers expressed their worry that Facebook would use Switzerland as a way to prevent all the legal drama that surrounds the regulation of the digital asset. The social networking giant established the first half of 2020 as the projected date for the launch of its crypto ecosystem.
Despite all the drama surrounding the regulation of the asset, the issue is still in the Financial Services Committee’s agenda as a priority, according to Waters. The chairwoman has been a vocal detractor of Libra, saying that the involved actors have showed “a demonstrated pattern of failing to keep consumer data private on a scale similar to Equifax.”
By Andres Chavez