Social networking giant Facebook has recently said that it may have to postpone the launch of its new digital currency until it has quashed the concerns of many different regulatory bodies around the world.
Little over a month ago, the company revealed the details for its cryptocurrency, which is being called Libra. It stated that it was hopeful that it would be put into circulation at the beginning of next year. Facebook first announced its plans towards the end of 2018 and company CEO and co-founder Mark Zuckerberg had even held meetings with the Bank of England to discuss its feasibility and what obstacles the company would need to overcome.
Facebook had planned to use this currency with a number of large international firms, including Visa, PayPal and Mastercard. It would incorporate its currency into a digital wallet known as Calibra, while allowing other companies to use Libra within their own apps.
Now, Libra may be on hold for a little longer after US senators raised their concerns with the company’s head of Libra, David Marcus in a meeting on Tuesday. The US Treasury and numerous other regulators were among those to voice their reservations.
Following the meeting with the Senate’s banking, housing and urban affairs committee, Marcus expressed that he understood that potential Libra users would not want their financial information to be connected with their social media data “loud and clear”.
Many of the legislators present at the meeting raised concerns about whether the company could be trusted within the financial industry, especially after being part of some huge data privacy scandals in recent times. The most notable of these was the Cambridge Analytica scandal, for which it was recently fined $5bn (£4bn).
Marcus stated that he acknowledges that Facebook would have to have the highest standards in terms of privacy, highlighting that this financial data would not be shared with Facebook’s social side.
The company has planned for the Libra Association to be headquartered in Geneva in Switzerland, and this too was questioned by the committee, with Marcus being asked if this was intentionally to avoid responsibility within the US.
Marcus explained that this was not the case and that it did not want to evade oversight by the US, but because Switzerland is internationally renowned as a financial centre and is also home to the likes of the Bank of International Settlements and the World Trade Organisation.
The Libra Association will still register with the Financial Crimes Enforcement Network, meaning that it will still be under the eyes of US regulators.