Mark Zuckerberg, the CEO of Facebook, appeared before the House Financial Services Committee to give insight into the company’s dealings. The members of Congress grilled the CEO raising their concerns regarding the company’s cryptocurrency project.
Libra is a risky project
Zuckerberg admitted on Wednesday that Libra was a ‘risky project’ but wanted to assure lawmakers that it would make transactions effortless. He added that the digital currency would open up the world financial system to more people. Facebook’s digital currency is among the most controversial tech projects of recent times. It has attracted more scrutiny from regulators and legislators.
Already Libra has been a topic of a congressional hearing, and the CEO discussed plans for its launch with lawmakers. The fate of Libra hangs on the balance after some of the members of the Libra Association withdrew from the project. Major partners in the project, such as PayPal, MasterCard, Stripe, and Visa, are already reconsidering their positions regarding support for the project. However, the Facebook CEO appeared pragmatic during his testimony to the House Committee regarding the prospects of Libra.
Lawmakers suggest keeping tech firms out of the financial services sector
The panel’s Democratic Chair Maxine Waters was very critical regarding the launch of Libra. She cited various concerns she had and those from Congress about Libra. Waters said that Facebook should be concentrating on addressing its several current failures and deficiencies before thinking of launching Libra. Facebook has, in the recent past, faced a series of data privacy scandals as well as criticism on disinformation.
Before the hearing, Waters had called for a stop of the Libra project ahead of its anticipated launch next year; she has already drafted a bill that could see tech firms barred from venturing into the financial services sector. Waters also suggested that lawmakers should consider breaking up Facebook and also called for the suspension of the project.
Besides Libra, the lawmakers also grilled Zuckerberg on other issues such as election interference, hate speech on Facebook, and Cambridge Analytica. The policymakers blasted the company for its failure to crack down on political disinformation, online child exploitation, and data privacy breaches. Both Democratic and Republican lawmakers agreed that given Facebook’s past scandals, it is not in apposition to offer financial services.
Libra to launch after US regulatory approval
Zuckerberg gave the lawmakers assurance that they will only launch Libra after receiving regulatory approval in the US. Libra is being developed by a consortium based in Switzerland and non-profits and VC firms. He further indicated that the company would withdraw from the Libra Association if the companies launch the project without the sign-off.
Zuckerberg, however, urged the US not to stifle innovation as it will give China an upper hand to develop a similar project. Although the hearing ended on a lighter note, some members of Congress could not hide their revulsion for Facebook. Others somehow were genuinely concerned about the impact of Libra.