Overview: Facebook Libra Project US Senate Hearing

Daniel Fowler
July 17, 2019

Cotton then pointed out that Facebook, which already has a history of censorship against conservatives, will face pressure to financially blacklist conservative organizations like Christian bakers and Breitbart News when consumers want to use the Libra currency with such organizations.

"We know we need to take the time to get this right", David Marcus, the Facebook executive leading the project, told the Senate Banking Committee at a hearing. Sherrod Brown, the panel's ranking member. In the latest news bite, Vermont senator and presidential candidate Bernie Sanders told the Washington Post Monday night that he would "absolutely" try to break up Facebook, Amazon, and Google if he's elected president. Among the critics of its crypto plans are President Donald Trump, his Treasury chief Steven Mnuchin and Federal Reserve Chairman Jerome Powell.

"It's an optional service that sellers can use if they want to", he said. He thought it was "delusional" to think individuals would trust the social media company with their "hard-earned" money.

He received a frosty welcome from Democratic lawmakers and several Republicans, who shared numerous same concerns. "What could possibly go wrong?" the senator said.

The senators' ire isn't coming as a surprise to the company, which has been reeling after a series of privacy breaches and questions about its role spreading fake news in the 2016 presidential campaign.

Facebook's top executive on the project, David Marcus, pledged to address their concerns about the proposed cryptocurrency, which is called Libra.

Marcus says in his prepared testimony Libra will be supervised by the Swiss Financial Markets Supervisory Authority, and Facebook has already engaged in preliminary discussions about its regulatory framework.

"Treasury has been very clear to Facebook, to bitcoin users and other providers of digital financial services that they must implement the same anti-money laundering and countering financing of terrorism, known AMLCFT safeguards as traditional financial institutions".

He added that cryptocurrencies "could be misused by money launderers and terrorist financiers".

Teens who spend more time on social media suffer worse depression
But for exactly that reason, it's important for modifiable risk factors to be monitored and harnessed for this at-risk age group. The study included almost 4,000 Canadian teens who were followed between ages 12 and 16.

"I'm not going to publicly speculate how long I think it will take them to get to the point where we're comfortable with it", he said.

Republican Senator John Kennedy of Louisiana peppered Marcus with a series of questions about what Facebook executives knew about Russian manipulation of social media ahead of the 2016 U.S. election to cast doubt on Facebook's trustworthiness.

Ahead of the hearing, he clarified that Facebook has no intention of competing with sovereign currencies, and plans to work with the Federal Reserve to ensure it won't affect monetary policy.

"Facebook has demonstrated, through scandal after scandal, that it does not deserve our trust, and that it should be treated like the profit-seeking corporation it is, just like any other company", he said in his opening statement.

But that's not the full picture: Calibra very much is Facebook's product, and by virtue of the fact it will be backed by the world's biggest and most powerful social network, it will become the dominant force in global cryptocurrency.

At least one senator - Pat Toomey (R-Pa.) - stood up for Facebook, saying that efforts to block the Libra launch were "wildly premature" and misguided.

Expect more scrutiny on how Facebook will leverage its power to push Calibra to come soon. The tech giants have denied bias and studies have no found evidence of it.

Marcus repeatedly told the committee that if American companies like Facebook don't lead innovation in the digital currency and payments area, others will. While Facebook owns and controls Calibra, it won't see financial data from it, the company says.

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