Nearly one-third of Earth’s population, some 2.4 billion people, use Facebook every month.

With that kind of reach, the social media giant’s new cryptocurrency, Libra, could become big enough overnight to be deemed “systemically important,” or large enough that its failure might threaten the financial system, Federal Reserve Chairman Jerome Powell told the Senate Banking Committee last week.

If that term prompts a feeling of déjà vu, it should. “Systemically important” was the description coined during the 2008 financial crisis to describe lenders the government propped up with billions of dollars in bailouts. In the decade since, it has become industry shorthand for lenders subject to heightened oversight by the Federal Reserve under a regulatory regime intended to prevent a repeat.

“Libra raises a lot of serious concerns” in areas from money laundering to consumer protection and financial stability, Powell said during two days of congressional testimony that served as a prelude to hearings next week on Facebook’s cryptocurrency plans and provided fodder to wary lawmakers.

Libra’s potential scale, given the size of Menlo Park, Calif.-based Facebook’s network, means it should be “subject to the highest level of expectations” as well as regulations requiring risk-controls and capital reserves for crises, Powell said.

“The question is, ‘Who is going to provide that and how and when,'” he added, explaining the Federal Reserve has already developed a working group to evaluate the matter. “It isn’t obvious at all from our current regulatory system that we have in place what we need to assess this.”

That perspective reflects the concern regulators and lawmakers alike have raised with cryptocurrencies overall during the past several years, particularly after the value of one of the best-known forms, bitcoin, took a nosedive in 2018.

Bitcoin and existing cryptocurrencies, generated through so-called mining — validation of transactions on a shared digital ledger known as blockchain — are issued by neither governments nor companies, meaning users have no recourse when their value sinks.

Trump administration officials from Treasury Secretary Steven Mnuchin to Securities and Exchange Commission Chairman Jay Clayton have worried that cryptocurrency investors don’t understand what they are buying and that the products could undermine financial stability.

The president himself made clear on Thursday that he shares those opinions, arguing on Twitter that cryptocurrency values are “based on thin air.”

Indeed, currencies that don’t exist outside cyberspace and have suffered rapid price fluctuations represent “the mother of all scams,” Nouriel Roubini, the New York University economist who predicted the 2008 financial crisis and was nicknamed “Dr. Doom,” told the Senate Banking Committee in October.

Libra in many ways appears designed to sidestep such concerns. It’s unlike older cryptocurrencies, including bitcoin, since it would be tied to major world currencies including the U.S. dollar, euro, and yen, and overseen by a Switzerland-based panel dubbed the Libra Association with members including Mastercard, Visa, and PayPal, each of which would have voting rights equivalent to Facebook’s.

On its own, Facebook plans to enable transactions through a new subsidiary, Calibra, that will offer a digital wallet as soon as 2020 through WhatsApp and Messenger as well as on a stand-alone basis.

The company’s safeguards, however, haven’t convinced Trump, a frequent Facebook critic who said Libra won’t be any more dependable than older cryptocurrencies.

“If Facebook and other companies want to become a bank, they must seek a new banking charter and become subject to all banking regulations,” he said. “We have only one real currency in the U.S.A., and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the world.”

While cryptocurrency has the potential to deliver real benefits, said Sen. Mark Warner, a Virginia Democrat, “Facebook has developed something of a trust deficit.”

The company, which Zuckerberg founded before dropping out of Harvard, has spent the past several years grappling with complaints that it was used to manipulate voters in the 2016 election, failed to prevent improper access to the accounts of millions of users, and suppressed conservative opinions from account holders.

“The Silicon Valley mindset of ‘move fast and break things’ doesn’t always work,” Warner said. “The truth is we could be creating a system” with the kind of oversight deficiencies that allowed warning signals before the financial crisis to go undetected, he said. “We could end up with that same circumstance around Libra.”

That’s why it’s important that the process of evaluating Facebook’s proposal “be a patient one and not a sprint to implementation,” Powell said, a statement with which the company concurred.

“We are very much aligned with the chairman around the need for public discourse on this,” said Elka Looks, a Facebook spokeswoman. “This is why we along with the 27 other founding members of the Libra Association made this announcement so far in advance, so that we could engage in constructive dialogue.”

While Facebook hopes to introduce Libra in the first six months of 2020, Rep. Maxine Waters, the California Democrat who leads the House Financial Services Committee, has urged the company to delay any further action until regulators and Congress complete a thorough review.

“Facebook’s planned products may ultimately be intended to establish a parallel banking and monetary policy system to rival the dollar,” she noted during a hearing with Powell on Wednesday. “Our current system of regulation lacks adequate coordination, safeguards and attention to cryptocurrency.

Ultimately, political considerations may prove a significant obstacle to Libra, said Jaret Seiberg, an analyst with Cowen Washington Research Group, which has tracked federal policy for the past 40 years.

“There is no constitutional right to a cryptocurrency,” he said. “It is important to appreciate that Libra cannot exist here as a viable payment option if the U.S. government wants to stop it.”

Other countries have even more flexibility, Seiberg said. China, for instance, could simply bar Libra’s use as it has already done with other cryptocurrencies.

In Britain, the central bank “approaches Libra with an open mind but not an open door,” Gov. Mark Carney said in late June.

“Unlike social media for which standards and regulations are being debated well after they have been adopted by billions of users, the terms of engagement for innovations such as Libra must be adopted in advance of any launch,” he said. “Authorities will need to consider carefully the implications of Libra for monetary and financial stability. Our citizens deserve no less.”

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