Consumer groups ask lawmakers to halt Facebook cryptocurrency project

Consumer groups ask lawmakers to halt Facebook cryptocurrency project
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Dozens of consumer advocacy groups are asking lawmakers and regulators to put a halt to Facebook’s plans to launch a cryptocurrency over concerns ranging from privacy issues to national sovereignty.

The broad coalition sent letters on Tuesday to congressional committees and regulatory agencies calling for them to impose a moratorium on Facebook’s Libra project “until the profound questions raised by the proposal are addressed.”

“The U.S. regulatory system is not prepared to address these questions. Nor are the regulatory systems of other nations or international institutions,” the groups wrote in the letter. “All of us believe the risks posed by Facebook’s proposal are too great to allow the plan to proceed with so many unanswered questions.”

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Among the 33 groups that signed the letter are Public Citizen, the Electronic Privacy Information Center, the Economic Policy Institute and the Center for Digital Democracy.

Facebook last month unveiled the Libra project, which will be housed in an independent nonprofit backed by major corporations like Visa, Uber and Paypal. A new Facebook subsidiary called Calibra would run a payment system using the currency, which Facebook argues would help those lacking access to established financial services.

But the proposal also raised immediate bipartisan concerns in Washington, where Facebook’s reputation has been devastated by privacy scandals and disinformation campaigns on its platform.

Lawmakers in the House and Senate quickly called hearings on the project for later this month, where a Facebook executive is expected to testify.

The alliance of consumer groups outlined a broad list of questions that the effort raises and the challenges it poses for regulators around the world. They questioned whether it could easily be used for money laundering, if it’s covered by consumer protection laws and how it could be manipulated.

“We have too much recent experience with insufficiently regulated financial markets spinning out of control to let this happen again,” they wrote. “The Facebook proposal must be put on hold until these numerous and fundamental questions are resolved.”

Facebook did not immediately respond when asked for comment.