The social media giant released the white paper for its Libra token yesterday. The stablecoin, will operate on a native eponymous blockchain, and will be backed by a basket of reserve assets “designed to give it intrinsic value” and mitigate volatility fluctuations.
Following the release of the project, U.S. regulators expressed their concern about the project’s possible effects on financial stability. Rep. Maxine Waters, chairwoman of the United States House of Representatives’ Financial Services Committee demanded that Facebook halt the project’s development while regulators investigate the project:
“Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action.”
On July 16, the Banking Committee will reportedly hold a hearing entitled “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations.”
Jerome Powell, the head of the U.S. Federal Reserve, said during an interest rate speech on Wednesday that Facebook had consulted regulators prior to the project:
“[Facebook] has made quite broad rounds around the world with regulators, supervisors and lots of people to discuss their plans and that certainly includes us.”
Government officials in other countries have also expressed their doubts and concerns with the new project. French Minister of the Economy and Finance Bruno Le Maire said that the government intends to “ask for guarantees” from Facebook in regard to Libra.