Members of Congress are again cricitizing Facebook following the tech giant’s announcement that it will launch a cryptocurrency called Libra in 2020.
Now the Senate Banking Committee has scheduled a hearing for July 16 meant to focus on the social media platform's digital currency plans, though the committee has yet to announce any witnesses.
Lawmakers, including Sen. Mark Warner (D-Va.), Sen. Sherrod Brown (D-Ohio), and Rep. Patrick McHenry (R-N.C.), have not responded enthusiastically to Facebook's Libra cryptocurrency project.
Rep. Maxine Waters (D-Calif.) asked the company to halt its plans altogether until officials have the chance to learn more.
Sen. Brown, in a statement Tuesday, said: “Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight.”
They join European regulators, who have also begun pushing back against Facebook ($FB).
In response to a request for comment, Facebook would not comment on Waters’ or Brown’s comments or say who it expects to send to the hearing.
Facebook, in a statement shared with other outlets, said: “We look forward to responding to lawmakers’ questions as this process moves forward.” The Verge reported that sources said that Facebook’s David Marcus, the creator of Libra and Calibra, a subsidiary of Facebook that will produce a digital wallet meant to accompany Libra, will attend the hearing.
In early May, Brown, along with Sen. Mike Crapo (R-Idaho), sent a letter to Facebook CEO Mark Zuckerberg requesting more information about Libra and how the tech giant will comport with existing financial regulation.
The senators also asked about how the company will ensure the protection of consumers’ financial data and privacy.
Facebook has sold its cryptocurrency as an opportunity to help the unbanked, the approximately 1.7 billion people globally that don’t have direct access to financial institutions.
In an interview on Thursday, Sen. Brown told Cheddar, “When Facebook wants to sound altruistic, they talk about helping the unbanked and all this. But this is about more market. It’s about more money. Facebook sends its lobbyists all over Capitol Hill, but nobody really quite understands how this is going to work.”
“This isn't the only answer. Facebook may say they have an answer. I don’t really trust that they do have an answer, and I don’t really trust their motives saying we're doing it for that reason,” said Brown.
When asked about the large support that Facebook’s seen from other companies — its partners in launching the currency include PayPal ($PYPL), Uber ($UBER), and eBay ($EBAY), among others — Brown said “of course they bought into it. They see it as a huge opportunity to make money.”.
Marcus has claimed that Calibra is meant to help separate data from Facebook’s social platform from this new, financial venture.
Facebook’s past privacy missteps are not the only criticisms the company’s cryptocurrency project is facing.
“The thing people should understand about Libra is that it is not a crypto like any other. It’s not even blockchain-based. It’s got its own data architecture. It’s not distributed — it’s highly centralized. It’s not particularly private. Facebook will have the ability to essentially get people to consent to let them use the data that goes on the system,” Travis Scher, vice president of investments at the Digital Currency Group, told Cheddar on Wednesday.
“They’re making a play to compete against central banks, and that is an inherently destabilizing idea,” said Scher. “We live in the era of move fast and break things, and the thing that they’re looking to break next is the banking system.”
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