Open Markets Submits Brief to Congress on Facebook Libra Currency Risks, Calls on Congress to Block Libra
Washington, D.C. — The Open Markets Institute has submitted a report to Congress in advance of tomorrow’s Senate Banking Committee hearing on Facebook’s plans to launch Libra, a global digital currency. Open Markets’ report emphasizes Facebook’s dismal track record on data privacy makes its proposal to launch Libra a dangerous liability at home and abroad and proposes a suite of policy options for Congress to consider.
“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 behavior,” said Open Markets Senior Fellow Matt Stoller. “Facebook absolutely can’t be trusted to manage international currency transactions and banking.”
The brief emphasizes the key risks of Facebook’s Libra currency and Calibra bank projects, including facilitating money laundering and terrorist financing, enabling anti-competitive activity, and sparking new coercive forms of debt collection.
We also highlight the potential for Libra to create global financial instability and undermine the fragile monetary and payments systems in developing countries. Significantly, Facebook’s Libra would reduce government power to manage money flows, which could undermine sanctions regimes.
Open Markets provides three basic policy options for Congress:
Congress and/or the Federal Reserve should block the creation of any parallel non-sovereign currency such as Libra.
Congress should impose a structural separation between all payment systems and non-financial services, especially technology corporations with extensive surveillance capabilities.
Congress and the Federal Reserve should explore having the Federal Reserve issue its own digital currency and public payment system accessible to ordinary citizens, providing a “public option” for citizens and businesses to pay one another without having to go through a thicket of unnecessary fees.
Read the full brief here.
For more information:
Matt Stoller in the New York Times: Launching a Global Currency Is a Bold, Bad Move for Facebook