Global watchdogs and top U.S. Congress members are calling for oversight of a digital asset being launched by Facebook and roughly two dozen other stakeholders.
It took less than a day for regulators and lawmakers to push back on Facebook’s move into cryptocurrency.
"With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users," Rep. Maxine Waters, a Democrat and chair of the House Financial Services Committee, said in a statement Tuesday, asking that the company agree to a pause the project until Congress and financial watchdogs can take a closer look.
This week's public hesitation on the crypto plan came from both parties. The senior Republican on the House Financial Services Committee, Rep. Patrick McHenry, called for a hearing on the project and "its potential unprecedented impact on the global financial system," while senior Democrat on the Senate Banking Committee, Sen.
Allaire, whose cryptocurrency company is backed by Goldman Sachs and also launched a U.S. dollar-backed stablecoin with Coinbase, said Facebook and a broader group of companies' entrance is an overall positive for the industry. The Libra blockchain — a digital ledger that can be seen by multiple parties but can't be altered — "looks interesting," Allaire said, but it's still not entirely clear just how "open" it will be and over what time frame.
There's also the recurring criticism of too much power in the hands of a few tech companies. The Justice Department is reportedly preparing an antitrust probe of Google and has been given jurisdiction over Apple's practices as part of a broad review into tech companies' behavior, according to Reuters. Meanwhile the Federal Trade Commission has reportedly taken over probes into Amazon and Facebook's effects on competition.
Smith is lobbying for U.S. policies including cryptocurrency tax treatment to change in order to accommodate the new tech. For example, the tax code has a de minimis exemption for personal foreign currency transactions. Cryptocurrencies dofor the exception and based on guidance issued in 2014, the IRS treats virtual currencies as property under US tax law, meaning the sale or exchange of tokens for other goods is a taxable event, she said.
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