23:09 GMT11 May 2021
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    Facebook announced on Tuesday plans to launch a new cryptocurrency called 'Libra' by 2020, and that it would create a digital wallet as part of a bid to make basic financial services globally accessible.

    Representative Patrick McHenry, senior Republican on the House Financial Services Committee, wrote a letter Tuesday to committee Chairwoman Maxine Waters, a Democrat, calling for a hearing on the Facebook cryptocurrency initiative, according to Reuters.

    "We know there are many open questions as to the scope and scale of the project and how it will conform to our global financial regulatory framework [...] It is incumbent upon us as policymakers to understand Project Libra. We need to go beyond the rumors and speculations and provide a forum to assess this project and its potential unprecedented impact on the global financial system", McHenry said in a letter, cited by Reuters.

    A spokesperson for McHenry said that the lawmaker is open to having Facebook testify directly about the move, Reuters reported Tuesday.

    Later on Tuesday, Maxine Waters said that Facebook should testify before the Congress on a new cryptocurrency product, adding that the US-based tech giant should halt the development of its plans until the US lawmakers and regulators could review them, according to Reuters.

    "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", Waters said in a statement, cited by Reuters.

    Facebook's cryptocurrency plans sparked a backlash among some prominent Democrats, including Senator Sherrod Brown, the senior Democrat on the Senate Banking Committee, and Representative Katie Porter, who sits on Waters's panel. Both reportedly called for close regulatory scrutiny of the move, citing data privacy concerns arising out of previous widespread Facebook security breaches.

    The US-based social media giant asserted that its proprietary digital currency will help to resolve the inaccessibility of "even basic financial services" that many across the world face.

    The Facebook 'Calibra' digital wallet will enable users to "send Libra to almost anyone with a smartphone, as easily and instantly as you might send a text message and at low to no cost," according to Facebook.

    Facebook also plans to offer new services such as bill pay or public transport fares while making purchases with "the push of a button" or "the scan of a code".

    In June, The Wall Street Journal reported, citing sources, that Facebook would announce a new cryptocurrency, and that Visa, Mastercard, PayPal, and Uber Technologies would invest some $10 million apiece in a consortium to manage the digital coin.


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