Facebook to face more scrutiny from Congress on Libra

Facebook to face more scrutiny from Congress on Libra

FILE PHOTO: Libra logo in illustration picture
FILE PHOTO: Small toy figures are seen on representations of virtual currency in front of the Libra logo in this illustration picture, June 21, 2019. REUTERS/Dado Ruvic

WASHINGTON: Facebook Inc will face more questioning on Wednesday (Jul 17) by US lawmakers over its planned cryptocurrency after a bruising first bout when senators from both parties condemned the project, saying the company had not shown it could be trusted.

The social media company is fighting to get Washington on its side after it shocked regulators and lawmakers with its announcement on Jun 18 that it was hoping to launch a new digital coin called Libra in 2020.

Since then, it has faced criticism from policymakers and financial watchdogs at home and abroad who fear widespread adoption of the digital currency by Facebook's 2.38 billion users could upend the financial system.

On Tuesday, the Facebook executive overseeing the project, David Marcus, was grilled by the Senate Banking Committee on the possible risks posed by Libra to data privacy, consumer protections and money laundering controls. Senator Sherrod Brown, the top Democrat on the panel, said the currency plan was "delusional."

Facebook has been on the defence against a backlash over mishandling user data and not doing enough to prevent Russian interference in the 2016 US presidential election.

Marcus, who was president of PayPal from 2012 to 2014, will testify before Congress again on Wednesday, this time before the Democrat-controlled House Financial Services Committee.

That hearing could prove to be even more tense. The panel has already circulated draft legislation that could kill the project by banning Facebook and other tech firms from entering the financial services space.

Marcus on Tuesday tried to assuage lawmakers by promising not to begin issuing Libra until regulatory concerns had been addressed. He also said the company unveiled the project at an early stage in order to get feedback from all stakeholders.

Source: Reuters/ec

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