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A rising chorus against Facebook's new currency

Credit: Reuters Studio
Published on July 16, 2019 - Duration: 01:57s

A rising chorus against Facebook's new currency

Facebook will be defending its new cryptocurrency Libra before Congress as more voices join the chorus of opposition.

Jane Lanhee Lee reports.

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A rising chorus against Facebook's new currency

0:44 Facebook is facing growing criticism from regulators and lawmakers over its plan to roll out its own cryptocurrency, called Libra.

And on Monday (July 15) U.S. Treasury Secretary Steve Mnuchin added his voice to the skeptics.

(SOUNDBITE) (English) U.S. TREASURY SECRETARY STEVE MNUCHIN, SAYING: "Many players have attempted to use crypto currencies to fund their malign behavior.

This is indeed a national security issue.

// We will not allow digital assets service providers to operate in the shadows and will not tolerate the use of the cryptocurrencies in support of illicit activities." A senate panel will take on the issue Tuesday (July 16) when David Marcus, who oversees the effort for Facebook, is expected to tell lawmakers that Libra isn't built to compete with traditional currencies and that it won't be launched until it has all appropriate approvals.

But that might not be enough to calm worried critics who point to Facebook's spotty track record with data privacy as at least one reason to proceed with caution.

Among the financial heavy hitters voicing concern?

Federal Reserve chairman Jerome Powell.

(SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN JEROME POWELL, SAYING: "Facebook has a couple billion plus users so you have to think for the first time the possibility of a very broad adoption and if there were problems there associated with money laundering terrorist financing, any of the things that we're all focused on including the company, they would immediately arise to systemically important levels just because of the mere size of the Facebook network." Facebook will try to convince lawmakers and regulators that it's up to the challenge to manage a vast cryptocurrency, adding that if America does not lead innovation in the digital payments area, others will.

And we could soon see a digital currency controlled by those whose values are dramatically different.

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