Facebook has been beset by scandals for years, struggling with concerns over privacy, election interference and corporate malfeasance. Now, lawmakers say it’s hard to trust it with a new form of online money too.
That’s what’s come out of hearings being held on Capitol Hill in Washington, DC so far this week, intended to discuss the company’s upcoming. Libra is a form of digital money that’s being backed by a consortium of companies including MasterCard, Visa, PayPal, Uber, eBay and Vodafone. If successful, Facebook says Libra could allow people who don’t have access to banks to still be able to store and manage their money, and it’ll work more easily on the internet.
“If America doesn’t lead innovation in the digital currency and payments area, others will,” Marcus saidon Tuesday.
That comment appeared to resonate with some lawmakers, who said cryptocurrency could help lower the costs of sending money and open access to capital.
“I just think we should be exploring this and considering the benefits as well as the risks and take a prudent approach,” said Sen. Patrick Toomey, a Pennsylvania Republican who sits on the Senate banking committee. “But to announce in advance that we have to strangle this baby … in the crib, I think is wildly premature.”
But many more regulators and lawmakers aren’t convinced.
Sen. Sherrod Brown, an Ohio Democrat, compared the social network to a toddler playing with matches.
“Facebook has burned down the house over and over and called every arson a learning experience,” Brown said. Launching a cryptocurrency, he said, is a “bad idea” and Facebook is “dangerous.”
Steven Mnuchin, the US Treasury secretary, said earlier this week that he has “” about Libra. Jerome Powell, chairman of the Federal Reserve, said he has “ .” President Donald Trump meanwhile has expressed concerns about how the value of cryptocurrencies “is highly volatile and based on thin air.”
Despite all that, Facebook’s vowed to work with the government before launching its service.
“I want to be clear: Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals,” Marcus said. “We know we need to take the time to get this right.”
The hearing, called Examining Facebook’s Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System, will begin Wednesday at 7 a.m. PT/10 a.m. ET. It follows theon Tuesday.
Day two will be livestreamed on the House Financial Services Committee’s website and on YouTube.
What we can expect
David Marcus, a powerful Facebook exec heading up the company’s involvement in Libra, will be at the hearing, as will professors of law and economics from Georgetown University, Columbia University and the Massachusetts Institute of Technology.