A day before the head of Facebook’s blockchain subsidiary was set to defend its planned digital currency Libra before the US Senate, a leading anti-trust advocacy group filed a stark warning to Congress, calling the social media giant’s foray into digital banking “a dangerous liability at home and abroad”.
Open Markets Institute submitted its brief in advance of Tuesday’s Senate Banking Committee hearing on Facebook’s plans to launch Libra. The report emphasises Facebook’s troubled track record on data privacy and proposed that Congress consider outlawing non-sovereign currency such as Libra altogether.
“Facebook has violated the privacy of its users and has been involved in a number of scandals that remain unresolved because the Federal Trade Commission continues to fail to curtail its behaviour,” said Open Markets senior fellow Matt Stoller. “Facebook absolutely can’t be trusted to manage international currency transactions and banking.”
The primary risks of Facebook’s Libra currency, according to Open Markets, include its potential to facilitate money laundering and terrorist financing, enable anti-competitive activity as the social media juggernaut gets into finance and the creation of “new coercive forms” of debt collection.