Facebook unveiled plans yesterday (July 18th) to create its own Bitcoin-like digital “cryptocurrency,” called Libra, that could be used by its more than two billion users around the world once it’s launched in the next six to 12 months. Facebook is launching Libra with corporate partners including PayPal, Uber, Spotify, Visa and Mastercard, and said a separate subsidiary is being created to handle the currency. Facebook officials emphasized that using Libra is a way to send money to other countries without paying significant fees charged by companies like Western Union, and it could also open up online commerce to the large numbers of people around the world who didn’t have bank accounts or credit cards.
With Facebook already under scrutiny over its privacy practices, the use of the platform to spread messages of hate, violent images and untrue news stories, and antitrust issues, launching a cryptocurrency will draw even more attention from regulators both in the U.S. and other nations. Already yesterday Democratic Rep. Maxine Waters, the House Financial Services Committee chairwoman, wants Facebook to suspend plans for Libra until Congress and regulators are able to study it more closely, and Senator Sherrod Brown, the ranking Democrat on the Senate Banking Committee, said the new cryptocurrency will give Facebook competitive advantages in collecting data on financial transactions as well as control over fees. Brown said, “Facebook is already too big and too powerful.”