Overseers of the U.S. financial system are falling behind in rules governing the emerging market for cryptocurrencies like bitcoin and Facebook’s (FB – Get Report) proposed Libra, a top U.S. lawmaker told Federal Reserve Chairman Jerome Powell on Wednesday.
Representative Maxine Waters, a California Democrat who heads the House Financial Services Committee, told Powell during a hearing in Washington that “our current system of regulation lacks adequate coordination, safeguards and attention to cryptocurrency.”
Facebook’s proposal for a new digital currency, which could serve as a form of payment for users on the social-media network, “raises serious privacy, trading, national-security and monetary-policy concerns for consumers and investors, the U.S. economy and the global economy,” Waters said.
The exchange came as Powell appeared on Capitol Hill for his semiannual testimony on monetary policy, which the Federal Reserve manages alongside its duties supervising the nation’s biggest banks, including big U.S. firms like JPMorgan Chase (JPM – Get Report) and Goldman Sachs (GS– Get Report) .
The Wall Street firms, which dominate markets in stocks, bonds, commodities and foreign exchange, have largely steered clear of trading cryptocurrencies, at least partly because of a lack of clear rules from U.S. agencies.
It was Powell’s first hearing with U.S. lawmakers since Facebook said in a June 18 press release that it planned to introduce a new digital currency called Libra, which will be available as a form of payment “to almost anyone with a smartphone, as easily and instantly as you might send a text message, and at low to no cost.”