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US isn't ready for Facebook's Libra cryptocurrency, critics argue

More than 30 groups urge Congress to intervene.

Cryptocurrency And Facebook Logo

Libra is expected to debut in the first half of 2020.

Nasir Kachroo/NurPhoto via Getty Images

Facebook's recently unveiled Libra cryptocurrency is facing pushback from groups concerned by unanswered questions about the digital coin. In an open letter Tuesday, more than 30 groups -- including the Economic Policy Institute and US PIRG -- urged Congress and regulators to impose a moratorium on Libra until the "profound questions" raised by Facebook's proposal are addressed.

Facebook is working with 27 partners to launch Libra, which is expected to be released along with a new digital wallet that works with Messenger and WhatsApp. People will be able to use Libra to purchase products, send money across borders and make donations. The cryptocurrency, which will be managed by the Libra Association and backed by stable financial assets, is expected to debut in the first half of 2020.

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Some lawmakers have already called for Facebook to pause its development of Libra, citing the company's seemingly endless list of scandals. In their letter Tuesday, the groups said Libra raises questions about everything from national sovereignty to consumer privacy. 

"The US regulatory system is not prepared to address these questions," the groups wrote. "Nor are the regulatory systems of other nations or international institutions."

Five Democratic lawmakers, including Rep. Maxine Waters, chairwoman of the House Committee on Financial Services, also sent a letter to Facebook executives on Tuesday asking the company to temporarily halt its plans to create a new cryptocurrency and digital wallet until Congress and regulators address concerns around privacy, security and other issues. 

"If products and services like these are left improperly regulated and without sufficient oversight, they could systemic risks that endanger US and global financial stability," lawmakers said in the letter.

The Libra Association says its planned 2020 launch leaves time for conversations with regulators and policymakers.

"The Libra Association maintains that financial inclusion, regulatory harmony and consumer concerns are not competing objectives, but rather work in lockstep with the Association's goals of offering a simple global currency and financial infrastructure that empowers billions of people," Dante Disparte, head of policy and communications for the Libra Association, said in a statement.

CNET's Queenie Wong contributed to this report.

Originally published July 2 at 8:53 a.m. PT.
Update 1:34 p.m. PT: Adds comment from Libra Association.
Update 3:45 p.m. PT: Adds letter from lawmakers