Facebook called before Senate panel over digital currency project
WASHINGTON (Reuters) – Facebook Inc’s plans to create a global cryptocurrency will face scrutiny from the US Senate Banking Committee on July 16, the latest sign that policymakers around the globe are casting a wary eye on the project.
The hearing will explore the project, dubbed Libra, as well as any data privacy considerations it may raise, the committee said on Wednesday. No witnesses have been announced yet, according to a committee spokesperson.
David Marcus, who oversees Facebook’s blockchain efforts, is expected to testify, according to a source in Washington familiar with the matter.
The announcement comes one day after the social media giant unveiled plans to launch a global cryptocurrency, which immediately attracted attention from regulators across the globe, and skepticism from Washington.
Representative Maxine Waters, the Democrat who chairs the House Financial Services Committee, said Tuesday she planned to similarly call Facebook to testify, and asked the company to halt the project while policymakers studied it.
In May, the leaders of the Senate Banking Committee wrote to Facebook seeking information on rumors of its cryptocurrency project, and how it would protect consumer information.
On Tuesday, a Facebook representative said the company looked forward to answering lawmaker questions. The company did not immediately respond to a request for comment on the July 16 hearing.
Facebook hopes to launch the Libra in the first half of 2020. They hope it will not only power transactions between established consumers and businesses globally, but offer unbanked consumers access to financial services for the first time.
Before Tuesday’s announcement, Facebook was already facing significant backlash over mishandling user data and not doing enough to prevent Russian interference in the 2016 U.S. presidential election. Those issues have led some government officials to call for Facebook to incur penalties, or be forcibly broken up.
Facebook’s cryptocurrency ambitions face privacy concerns
The social networking giant has linked with 28 partners including Mastercard, PayPal and Uber to form Libra Association, a Geneva-based entity governing the new digital coin, according to marketing materials and interviews with executives. No banks are yet part of the group.
To facilitate transactions, Facebook also created Calibra, a subsidiary that will offer digital wallets to save, send and spend Libras. Calibra will be connected to Facebook messaging platforms Messenger and WhatsApp.
The whole system is scheduled to launch in the first half of 2020.