The Pennsylvania Republican said Libra is an "exciting innovation" that aims to solve the volatility that hurts other digital currencies, but he still has questions for the social media giant before its 2020 launch.
"I don't want to presume in advance that we've got to prevent the development of some new innovation," Toomey said. "Maybe there could be some innovation in this space that would provide security and that would dramatically lower the cost of transactions."
Later Tuesday, Toomey and other members of the Senate Banking Committee get to grill Facebook's David Marcus, head of Facebook's Calibra digital wallet, which will be used to store Libra.
"Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs and human trafficking," Mnuchin said.
Facebook has responded to criticism by maintaining Libra's independence from the social media company. Libra will not be run by Facebook, but rather by a nonprofit association supported by a range of companies and organizations.
In a response to Mnuchin's comments, Facebook told CNBC, "They anticipated critical feedback from regulators, central banks, lawmakers around the world." The tech giant also said Libra was announced a year before its anticipated launch date, "so that we could have those conversations."
Toomey does have his questions for the company. In Tuesday's "Squawk Box" interview, he said he's questioning what Facebook's business motive is, since the wallet, not the currency, is its expected income driver.
"It sounds like they're suggesting it's not about getting data," Toomey said. "If that's not the real motivator here, what is? That's a real question for me."
The launch comes at a time when Facebook is trying to rebuild user trust after data privacy and security scandals plagued the company since the Cambridge Analytica scandal, in which the data of millions of users was obtained without authorization while the research firm was working for the 2016 Trump campaign.
But if Libra is launched, Toomey said, it's a more attractive option than bitcoin, since it should be less volatile.
"I don't know how this plays out," he said. "But I think it's an exciting innovation."
At the same time, the California Republican was critical of Libra. The House Financial Services Committee takes its turn Wednesday with a hearing scrutinizing Libra.