Politics

Democratic Sen. Sherrod Brown calls for strict regulation of Facebook cryptocurrency Libra

Key Points
  • Facebook's plans for a new cryptocurrency, Libra, must be closely scrutinized, Sen. Sherrod Brown said in an interview with CNBC's "Squawk Alley" on Thursday.
  • "We are skeptical when we hear of Facebook ... running a risky cryptocurrency operation out of a Swiss bank account," Brown said.
  • He said that the Senate Banking Committee would be closely scrutinizing the company's plans and examining possible measures for regulating it.
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Sen. Sherrod Brown: Can't allow Facebook's 'Libra' without oversight

Facebook's plans for a new cryptocurrency, Libra, must be closely scrutinized, Sen. Sherrod Brown, D-Ohio, said Thursday.

Brown, the ranking Democratic member of the Senate Committee on Banking, Housing & Urban Affairs, questioned Facebook's plans, citing widespread public suspicion of the company, the role that the financial industry played in the 2008 recession, and the largely unregulated nature of the Swiss banking system. A nonprofit association based in Geneva will run Libra.

"We are skeptical when we hear of Facebook ... running a risky cryptocurrency operation out of a Swiss bank account," Brown said in an interview with CNBC's "Squawk Alley." "There are no rules — essentially it's unregulated. [Facebook] earned the skepticism, perhaps the cynicism that people have about their operation."

The idea of Facebook running a cryptocurrency "strikes fear" in many members of the public, Brown added.

He said the Senate Banking Committee would closely scrutinize the company's plans and examine possible measures for regulating it.

Facebook did not immediately respond to CNBC's request to comment on Brown's remarks.

The social media company unveiled its plans for Libra on Tuesday. It said a nonprofit association supported by a range of companies and organizations, rather than Facebook itself, will run the currency. But Facebook does have a plan to profit from it with a new subsidiary, Calibra, which is building a digital wallet of the same name for storing and exchanging the currency.

Brown, who considered a run for the 2020 Democratic presidential nomination before deciding against it, tweeted a call for oversight of Libra following Facebook's announcement Tuesday. He said the company is already "too big and too powerful" and has failed to protect users' privacy.

Brown's comments come amid a wave of concerns in Washington about Facebook's tactics.

Facebook shares took a hit earlier this month following reports that the Federal Trade Commission could look into how the company affects digital competition. Democratic presidential candidate Sen. Elizabeth Warren, D-Mass., has also called to break up Facebook.