Facebook's Cryptocurrency Plan Drawing Criticism From Washington

(Bloomberg) -- Facebook Inc.'s plan for its own digital currency is drawing yet another round of fire in Washington, this time in the form of a letter from more than 30 groups influential with Democrats demanding a halt to the project to deal with the “profound questions” it raises.

In their letter to leaders of five congressional committees, organizations including the Service Employees International Union, the Consumer Federation of America and Public Citizen argued that regulators aren't prepared to address issues surrounding the Libra project and that the social-networking giant needs to present a fuller picture of its plans.

“All of us believe the risks posed by Facebook's proposal are too great to allow the plan to proceed with so many unanswered questions,” the groups said. Their demand echoes House Financial Services Committee Chairwoman Maxine Waters' earlier call for lawmakers to impose a moratorium and may set the tone for this month's congressional hearings on the issue.

Waters and other committee Democrats on Tuesday sent a letter to Facebook Chief Executive Officer Mark Zuckerberg, Chief Operating Officer Sheryl Sandberg and David Marcus, the executive responsible for Libra, formally asking the company to agree to halt development “until regulators and Congress have an opportunity” to examine issues tied to cryptocurrency.

Libra raises “serious privacy, trading, national security and monetary policy concerns for not only Facebook's over 2 billion users, but also for investors, consumers and the broader global economy,” Waters and the other lawmakers said in their letter.

Facebook's announcement of the digital currency plan last month incurred a fresh wave of lawmaker criticism of the company, which was already under fire in Washington for a series of stumbles including major data breaches and allowing Russians to hijack its platform during the 2016 election to push Donald Trump's candidacy.

Facebook's plans for rolling out the cryptocurrency builds in time to talk with regulators and policymakers and “take their questions into account,” according to Dante Disparte, a spokesman for the not-for-profit organization that will govern the planned payment network and manage its financial reserves.

“The Libra Association maintains that financial inclusion, regulatory harmony and consumer concerns are not competing objectives, but rather work in lockstep with the association's goals of offering a simple global currency and financial infrastructure that empowers billions of people,” Disparte said in a statement.

To contact the reporter on this story: Austin Weinstein in New York at aweinstein18@bloomberg.net

To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott

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