A group of senators have introduced a bill that would classify Facebook’s proposed cryptocurrency Libra as a security under the law, according to a report by CNBC.
The move would potentially add to the already numerous regulatory hurdles that Facebook and the Libra Association would have to clear to make the cryptocurrency a reality, as Facebook has said repeatedly that it will not introduce the currency without regulatory approval.
The bill is called the “Managed Stablecoins are Securities Act of 2019” and was proposed by two members of the House Financial Services Committee, Reps. Sylvia Garcia and Lance Gooden.
When Garcia announced the bill, he talked about Libra specifically, saying that the Facebook coin, as well as other managed stablecoins, “are clearly securities under existing law.”
“Bringing clarity to the regulatory structure of these digital assets protects consumers and ensures proper government oversight going forward,” Garcia said.
Gooden added that the bill is necessary so consumers can be more informed about the currencies before they deal with them.
“In what are called ‘managed stablecoins’, we have trusted brands marketing digital assets to consumers as secure and stable,” Gooden said. “Everyday investors need to know they can trust the issuers behind their financial assets. This bill would bring them the security they deserve by applying the laws we use to regulate financial securities to this new breed of digital currencies.”
Facebook has repeatedly denied the notion that Libra is a security, and when asked to describe it, Libra chief David Marcus said it’s more like PayPal.
Facebook said Libra is going to be more stable than say, bitcoin, because it will be backed by a number of currencies, including the U.S. dollar.
Marcus said he considers Libra as “digital gold” instead of actual currency.
Garcia said that he was “disappointed” in Facebook CEO Mark Zuckerberg’s responses about Libra during a recent hearing on the matter.