Mubasher: Facebook’s proposed crypto coin, Libra, raised questions regarding consumer protection, data privacy and the impact on monetary policy and other issues, the International Monetary Fund warned.

Although it has the potential to expand financial inclusion, “if you look particularly at countries that are not reserve currency countries, would this lead to backdoor dollarisation?” the IMF’s senior economist Gita Gopinath was quoted by Reuters.

The IMF was flagging risks and concerns about Facebook’s plans.

“It is very important for regulatory agencies in the world to pay close attention to these developments and to make sure that they are not too late in undertaking the right steps,” Gopinath said.

The social media giant announced in late June its plan to launch the new cryptocurrency next year, dealing a shock to regulators and legislators in the US and elsewhere.

Facebook’s executive overseeing the Libra project, David Marcus, faced a second round of questioning before Congress, from the House Financial Services Committee.

Marcus faced the same worries regarding Facebook’s previous privacy issues in a Senate Banking Committee hearing on Tuesday, with a new concern raised over the nature of the Libra project itself.

“I don’t think you should launch Libra at all […] because the creation of a new currency is a core government function and should be left to democratically accountable institutions, that are accountable to the American people,” Congress Representative Carolyn Maloney said.

Nevertheless, “at the very least, you should agree to do this small pilot program first, fully overseen by the Federal Reserve and [the Securities and Exchange Commission],” Maloney noted.

Facebook is one of the 28 founding members of the Libra Association which will be based in Geneva.

The US company is engaged in talks with Swiss regulators about the framework.