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Facebook's Libra will rival US monetary system cites US House Financial Services Committee
The US House of Representatives’ Financial Services Committee has called for a halt to Facebook's cryptocurrency-based digital wallet citing serious concerns over privacy, trading, national security, and monetary policy issues.

July 04, 2019 | Fatima G. Parel

A month ago, varied reactions greeted Facebook’s (FB) revelation, sharing its plans to launch a new digital wallet along with a new global currency, named Calibra and Libra, respectively. Yet none was more powerful than the letter sent on 2 July 2019 by the United States House Committee on Financial Services addressed to FB founder, chairman, and CEO Mark Zuckerberg, FB chief operating officer (COO) Sheryl Sandberg, and David Marcus, CEO of Calibra.

In the letter, the committee, chaired by Representative Maxine Walters, noted that FB provided very little information on the intent, roles, potential use, and security of Libra and Calibra. The committee further raised an alarm on potential risks, saying “If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger US and global financial stability. These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past. Indeed, regulators around the globe have already expressed similar concerns, illustrating the need for robust oversight”.

Walters also reiterated the committee’s concerns on what she deemed were threats to privacy and security issues. “Investors and consumers transacting in Libra may be exposed to serious privacy and national security concerns, cybersecurity risks, and trading risks. Those using Facebook’s digital wallet – storing potentially trillions of dollars without depository insurance– also may become unique targets for hackers. For example, during the first three quarters of 2018, hackers stole nearly $1 billion from cryptocurrency exchanges. The system could also provide an under-regulated platform for illicit activity and money laundering.”

Although it is not only in the US that the same concerns have been raised over the use of cryptocurrency.

Early last year, the Japanese government also ...

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Keywords: Digital Wallet, Cryptocurrency, Mobile Payments, Technology, Cybersecurity, Trading, Anti Money Laundering