Facebook’s Libra cryptocurrency grilled at House hearing

For the second day in a row, Republican and Democratic lawmakers slammed Facebook over its digital currency, Libra. 

Members of the House Committee on Financial Services backed the message of their Senate colleagues from yesterday: they don’t trust Facebook.

Rep. Maxine Waters opened the hearing by blasting Facebook’s “pattern of failing to keep consumer data private on a scale similar to Equifax” and said that if Libra launches, “the company and its partners will yield immense economic power that could destabilize currencies.”

Libra is a blockchain-based digital currency, or cryptocurrency, which Facebook formally announced last month. It’s overseen by a non-profit headquartered in Switzerland, the Libra Association, of which Facebook is a member. The social media giant also created a subsidiary group, Calibra, for its own Libra-related products.

Rep. Alexandria Ocasio-Cortez listed all the different industries Facebook has disrupted — publishing, advertising, telecommunications — alluding to the monopolistic nature of of the company. 

“Why should these activities be consolidated under one corporation?” she said.

“I don’t think you should launch Libra at all,” stated Rep. Carolyn Maloney. “At the very least you should agree to do this small pilot program fully overseen by you, the Federal Reserve and the SEC.”

“We will take the time to get this right,” replied David Marcus, head of Calibra, without agreeing to the proposed pilot program.

One of Facebook’s main selling points for the digital currency is the ability to provide instantaneous monetary transfers at minimal fees. Rep. Patrick Henry asked Marcus, a former president of PayPal, why they needed to create its own currency to do so.

“We would like for Libra to be a digital global currency and as a result be one unit of digital currency for the whole world.” Marcus replied. “This is why we believe it’s the right approach.”

Image: Alex Wong / Getty Images

Much like at the Senate’s hearing, Republicans commended Facebook on the endeavor to build something new. Some on the committee even criticized the idea of holding hearings on Libra right now, just one month after the company’s announcement.

“Kudos on the innovation,” said Rep. Sean Duffy. 

But, this didn’t stop the Republican Congressman from stumping Facebook’s Marcus with a line of questioning regarding who can use Libra.

“Can Milo Yiannopoulos use Libra? Can Louis Farrakhan? Both of those people are banned from Facebook,” said Duffy. “Can a gun dealer?”

The sale of firearms on Facebook’s marketplace is banned from the social networking platform.

“I don’t know yet,” explained Marcus.

Concerns regarding Libra being used to fund drug trafficking and terror, as well as its general effects on economies and markets across the world, were shared by both sides of the aisle. 

“I’m concerned a 2020 launch date represents deep insensitivities about how Libra could impact U.S. financial security, the global financial system, the privacy of people across the globe, criminal activity and international human rights,” said Rep. Ann Wagner, a Republican. 

“We need Zuckerberg here,” Democratic Rep. Brad Sherman demanded. “This is an attempt to transfer enormous power from America to Facebook.”