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Congress will move ‘aggressively’ to examine Facebook’s cryptocurrency, Rep. Maxine Waters says

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Rep. Maxine Waters, a Democrat from California and chair of the House Financial Services Committee, at a congressional hearing.

Andrew Harrer | Bloomberg | Getty Images

Top lawmakers are not hesitating to examine Facebook’s ambitious new cryptocurrency project.

“We’re going to move aggressively and very quickly to deal with what is going on with this new cryptocurrency,” Rep. Maxine Waters, D-Calif., chairwoman of the House Financial Services Committee, told CNBC’s “Closing Bell ” Thursday. “I think it’s very important for them to stop right now what they’re doing so that we can get a handle on this.”

Facebook has faced widespread scrutiny in the days following its plan to launch a global cryptocurrency. The social network’s announcement Tuesday caught the attention of Waters and other senior congressional finance committee members, global regulators, former lawmakers and industry insiders who questioned Facebook’s ambitions. 

In a statement Tuesday, Waters asked Facebook to delay the project, which she said was a continuation of its “unchecked expansion and extending its reach into the lives of its users.”

“We don’t have a regulatory agency to oversee who they are and what they’re doing,” Waters said on CNBC Thursday. “This is like starting a bank without having to go through any steps to do it.” 

Earlier this week, Facebook announced that it would launch a cryptocurrency run by the nonprofit Switzerland-based Libra Association in 2020. The project will not be controlled or fully run by Facebook, according to its white paper. It’s also being run by a collaboration of organizations and companies that include Stripe, Uber, Mastercard, Visa and PayPal and Spotify. But Facebook has plans to profit from it through a new subsidiary Calibra that is building a digital wallet to store and exchange the cryptocurrency.

Federal Reserve Chairman Jerome Powell said that Facebook spoke to the central bank about the digital currency and that to his knowledge, the social network has made “quite broad rounds around the world with regulators, supervisors and lots of people to discuss their plans and that certainly includes us.”

Waters is not the only Congress member pushing bapock on Facebook’s plan. The senior Republican on the House Financial Services Committee, Rep. Patrick McHenry highlighted “its potential unprecedented impact on the global financial system” and called for a hearing. Sen. Sherrod Brown, the senior Democrat on the Senate Banking Committee, said “Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy.”

“We look forward to responding to lawmakers’ questions as this process moves forward,” a Facebook spokesperson told CNBC.

Waters highlighted consumer protection, data and privacy issues and “ways that Facebook has conducted itself in the past” as reasons for a Congressional hearing.

“There are a lot of issues with Facebook,” she said. “They’re creating their own cryptocurrency — it’s going to be an alternative to the dollar, so I think it’s very important for them to stop right now what they’re doing so that we can get a handle on this.”

Source: CNBC

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