The government isn’t too sure about Facebook’s plan to spearhead a new cryptocurrency due to launch next year.
After all, given the social network’s prior history with data protection management, what could possibly go wrong with allowing it to help launch a massive decentralised, untraceable digital currency?
At the moment, Facebook is part of a large number of firms – which include Mastercard and Visa – that are planning to launch the ‘Libra’ currency in 2020.
Any Facebook user will be able to use Libra through a digital wallet called Calibra, while other companies will be able to use Libra in their own apps.
Last week, US senators expressed their reservations about the project, as Libra chief David Marcus gave evidence to the Senate Banking, Housing and Urban Affairs Committee.
Mr Marcus was told Facebook ‘doesn’t deserve our trust’ and ‘should be treated like the profit-seeking corporation that it is.’
Ouch.
Meanwhile, over here on British soil, a similar theme has emerged. Damian Collins, chairman of the Digital, Culture, Media and Sport Committee, has expressing fears that Libra could be open to fraud.
‘To me, (Libra) suggests that Facebook’s almost trying to turn itself into its own country,’ he told Financial News. ‘It’s a global organisation that doesn’t have physical boundaries but basically has a global community who are solely under the oversight of Mark Zuckerberg.’
‘If we’re going to have this payment system created by Facebook that exists within a Facebook walled garden, which no-one really has access to or can question, then our concern has got to be that this system is going to be open to massive fraud.’
Facebook has defended the cryptocurrency, saying it will not have special rights or privileges, and is willing to hold back from launching the service until it has satisfied the concerns of regulators around the world.
Mr Marcus said the social network also understands ‘loud and clear’ that people do not want financial details connected to their social media data.
However, Bank of England Governor Mark Carney has cautiously welcomed the cryptocurrency, saying the Bank ‘approaches Libra with an open mind but not an open door.’
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