Regulation

EU Probes Libra Risks With New Questions For Facebook

EU Probes Libra Risks With New Questions

The European Commission has asked Facebook and the Libra Association to respond to a series of questions on financial stability, money laundering and data privacy risks that could be posed by the project, CNBC reported on Monday (Oct. 7).

Facebook and the Libra Association were sent a list of questions from the commission’s executive branch asking for a better understanding of the proposed Libra cryptocurrency, an EU spokesperson told CNBC.

European countries like France have vowed to block Libra’s development, saying it poses a risk to the sovereignty of nations’ currencies. Data privacy regulators in Europe have also expressed doubts over the combination of “vast reserves” of personal and financial information that would be gathered as part of the Libra proposal.

Earlier this month, PayPal announced it was withdrawing from Facebook’s Libra Association. Visa and Mastercard also have been rumored to be wavering in their support for the project.

Originally, there were 28 companies backing Libra’s development and ultimate deployment. Members of the Libra Association consortium were asked to invest at least $10 million each to help cover the operating costs of coming to market with the digital coins and to fund their issuance.

The PayPal move, though not explicitly tied to any series of events, comes as the Libra project has been criticized and scrutinized by several global regulators focused on privacy and security. Facebook, for its part, had said it would not have sole control over the crypto.

As has been reported, Rep. Maxine Waters, the Democrat lawmaker who serves as chairwoman of the House Financial Services Committee, had gone on record to state that the crypto development should be halted while Congress “can get a handle” on Libra, and said that Congress would look to “move aggressively” on the matter.

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