Facebook faces growing opposition to Libra cryptocurrency

As lawmakers kick off hearings on Capitol Hill Tuesday about a cryptocurrency plan launched by a group led by the social media giant Facebook, the 'Libra' idea faces increasing resistance from the White House, federal banking regulators, and lawmakers in both parties.

"The Treasury Department has expressed very serious concerns that Libra could be misused by money launderers and terrorist financiers," said Secretary of Treasury Steven Mnuchin on Monday.

"This is indeed a national security issue," Mnuchin said, in a rare briefing for reporters at the White House.

On Capitol Hill, lawmakers share many of the same concerns, and heard those amplified last week at a hearing by Federal Reserve Chairman Jerome Powell.

"Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability," Powell said in remarks to the House Banking Committee - where he seemed very ready to give a public warning about Libra.

"I strongly believe that we all need to be taking our time here," Powell told lawmakers about the Libra proposal.

"We all want innovation," said Rep. Steve Stivers (R-OH). "But we all want innovation that protects data security."

"We got to have a better understanding of the impact on our economy and our ability to manage money," said Rep. Ed Perlmutter (D-CO), as lawmakers in both parties expressed concern.

More of that is going to be heard on Tuesday and Wednesday, as the head of the Libra project for Facebook goes before House and Senate committees

"Libra is about developing a safe, secure, and low-cost way for people to move money efficiently around the world," said David Marcus, the head of the Libra effort.

"We believe that Libra can make real progress toward building a more inclusive financial infrastructure," Marcus will tell lawmakers, even as he agrees with the Federal Reserve chairman's call for a thorough review of the cryptocurrency plan.

But the idea is already a loser in the mind of President Trump.

"If Facebook and other companies want to become a bank, they must seek a new Banking Charter," Mr. Trump tweeted last week, as he made clear his opposition to Libra.

"I’m not comfortable today," Treasury Secretary Mnuchin said of the Facebook Libra plan. "As I’ve said, they and others have a lot of work to do before they get us comfortable."

About the Author