WASHINGTON, July 16,2019- Facebook’s venture into cryptocurrency raised a high degree of concern among some members of the Senate Banking Committee at a hearing on Tuesday. Committee Ranking Member Sen. Sherrod Brown, D-Ohio., said Facebook is “dangerous” and that it does “all it can” to manipulate billions of users and generate profit.
Brown also accused Facebook of playing a part in the 2016 presidential election as well as “abetted genocide in foreign countries.”
“The last thing we need is to concentrate more power for huge corporations,” he said.
Testifying before the committee was David Marcus, head of Calibra, Facebook’s digital currency project. He said that the company will not offer official use of its currency, known as Libra, until its regulatory concerns have been fully addressed.
Libra will also prioritize privacy and consumer protection and create safeguards that will exceed existing standards, he said. People possessing Calibra digital wallets will be able to send and receive money from their smartphones without the intervention of a third party, such as a bank.
Concerns from other committee members focused on the possibility that Facebook may share the information obtained from Calibra with third parties. Sen. Martha McSally, R-Ariz., said that Facebook has had “repeated violations” of user privacy in the past. Sen. Mark Warner, D-Va., speculated whether WhatsApp and Messenger, both subsidiaries of Facebook, may embed Calibra’s database into their systems.
Sen. Thom Tillis, R-N.C., said that the advent of Libra could be a good opportunity to set international standards for consumer rights. However, problems could stem from cryptocurrency’s current lack of efficient regulation.
Sen. Kyrsten Sinema, D-Ariz., said that Facebook’s digital currency could have an impact on national security and make it easier for users to facilitate illegal transactions.
Marcus said that users need to submit a government-issued identification in order to make transactions on Calibra. Calibra will also work with the Federal Reserve and other banks to ensure that they have no conflicting monetary policies.
“To earn peoples’ trust, we have to have the highest standards of privacy,” he said. Calibra’s system is designed to separate financial and personal data, so that the platform and entities on it cannot exploit that data.
The United States should “absolutely” lead the way on virtual currency, said Marcus, because if the U.S. fails to act, we may see a country with values different from ours move head of us in that industry.
(Photo by Masha Abarinova)
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