Facebook’s proposed digital currency faces calls for more information about how user data will be protected
The Information Commissioner’s Office (ICO) has joined forces with other data protection watchdogs around the world in questioning Facebook over its proposed Libra digital currency.
The Information Commissioner, Elizabeth Denham, signed a joint statement alongside her counterparts in the United States, Canada, Australia and the European Union, “to express our shared concerns about the privacy risks posed by the Libra digital currency and infrastructure.”
Last month the chairman of the US Federal Reserve, Jerome Powell, said that Facebook’s Libra cryptocurrency project, “cannot go forward” until serious concerns are addressed.
Facebook is already facing regulatory concerns about the project, and major banks in the US and Europe have also voiced scepticism about the scheme.
Indeed, no banks were present amongst Libra’s dozens of initial backers when the project launched in June, although Facebook said it is in talks with banks and expects banks to have joined the Libra Association by the time the project launches next year.
The association’s founding members do however include Visa, MasterCard and PayPal.
But now the UK’s ICO has joined others in expressing concern about the project.
The joint statement to Facebook asks it to provide details of how customers’ personal data will be processed in line with data protection laws.
It also asks for assurances that only the minimum required data will be collected, that the service will be transparent, and requests details of how data will be shared between Libra Network members.
“The ambition and scope of the Libra project has the potential to change the online payment landscape, and to offer benefits to consumers,” said the Information Commissioner Elizabeth Denham. “But that ambition must work in tandem with people’s privacy expectations and rights.”
“Facebook’s involvement is particularly significant, as there is the potential to combine Facebook’s vast reserves of personal information with financial information and cryptocurrency, amplifying privacy concerns about the network’s design and data sharing arrangements,” said Denham.
“We know that the Libra Network has already opened dialogue with many financial regulators on how it intends to comply with financial services product rules,” said Denham. “However, given the rapid plans for Libra and Calibra, we are concerned that there is little detail available about the information handling practices that will be in place to secure and protect personal information.”
“I hope this statement will prompt an open and constructive conversation to ensure that data protection is a key part of the design process and that data protection regulators are a key consultative group as the Libra proposals develop,” she concluded.
Whatever Facebook’s public comments on the project, it is clear that concerns from regulators and central banks about Libra are not going away anytime soon.