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North American Watchdog Groups Demand Moratorium On Facebook's Libra

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A group of North American privacy, economic policy and consumer watchdogs has called on US Congress and regulators to impose a moratorium on Facebook's Libra cryptocurrency project.

An open letter addressed to legislators, regulators, and Facebook and Calibra employees says the Facebook proposal to create a new cryptocurrency as part of its broader Libra project raises profound questions about national sovereignty, corporate power, consumer protection, competition policy, monetary policy and privacy.

Neither the U.S. regulatory system, nor the regulatory systems of other nations or international institutions is prepared to address these questions, according to them.

The organizations also urged Facebook to put the implementation of the new cryptocurrency project on hold until the Congress and regulators have an opportunity to assess and react to a far more detailed presentation that has not yet been made public.

While some of the groups say that the proposal is too dangerous to be permitted to proceed, some others believe it should be permitted if appropriate controls and rules are in place.

They seek answers from Facebook to a long list of questions on governance; national sovereignty; law enforcement, including tax policy; consumer protection; privacy; competition; and systemic risk.

A pertinent question is about how will the Libra Association relate to national governments and intergovernmental organizations. "Will it consider the impact of its decision on particular national interests," the letter asks.

They fear that a decision to adjust the basket of reference currencies could have a major impact on the real value of fiat currencies.

The groups want to know what impact might Libra have on monetary policy in smaller and developing countries.

The letter expresses concern that Libra may provide an easy mechanism for money laundering, facilitate tax evasion and tax fraud, and be used as a tool to evade economic sanctions.

There are 33 signatories to the letter, which include the Center for Digital Democracy, Center for International Policy, Consumer Federation of America, Media Alliance and the Service Employees International Union.

Facebook Inc. earlier this month announced plans to launch a cryptocurrency called Libra in 2020.

The social media giant claims that Calibra will have strong protections to keep the users' money and information safe, and promises to take steps to protect their privacy.

On Tuesday, a group of Democrat lawmakers had asked Facebook to freeze the Libra project as House Financial Services Committee and its Senate counterpart are scheduled to hold hearings this month to determine how it would operate and what protections would be implemented to protect user privacy.

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