It was Day 2 of Facebook’s Congressional Hearing. The pressure was on the social media giant to present a strong case to the House. A strong group that has never been a fan of the social media giant. After a rather grueling day of being questioned by the Senate Banking Committee, David Marcus, Facebook’s Blockchain Chief, headed to the House of Representatives to face questions from the House Committee of Financial Services.
Fresh Fury from Waters
Rep. Maxine Waters (D CA), the Chairperson of the Committee, was the first lawmaker to raise concerns about the Libra and Facebook, and pretty much turn the attention of Capitol Hill to the company’s crypto efforts. Once again, Marcus faced the uphill task of convincing lawmakers that despite its past, Libra would be different.
“Ultimately, if Facebook’s plans come to fruition, the company and its partners will wield immense economic power that could destabilize currencies and governments,” she stated.
Waters jabbed at Facebook’s role in the 2016 election, where it was reported that malicious Russian state operatives purchased ads on the platform to influence the outcome of the election that produced President Trump.
However, if the Senate hearing was considered difficult, Marcus and Facebook were met with a brick wall at the House. Here, the general consensus was pretty much the same; Facebook’s past makes it near impossible for anyone to trust them with their paychecks.
Facebook let Russia manipulate voters and put Trump in the White House. Now they want to create their own currency? With no regulations? And run it out of Switzerland? We need to stop this now! @FSCDems
— Maxine Waters (@RepMaxineWaters) July 17, 2019
Forcing a Compromise
However, while a lot of lawmakers were quick to recommend that the social media giant should close up shop before even launching, Rep. Carolyn Maloney (D-N.Y.) proposed that Facebook could launch Libra to a million users as a pilot program, doing so with significant regulatory oversight.
In part, Maloney said, “I don’t think you should launch Libra at all because the creation of a new currency is a core government function. But at the very least you should agree to do this small pilot program first.”
Facebook’s Blockchain Head said that the tech giant had already thought of this approach. He added that a part reason why they announced the whitepaper on time was to allow for regulatory scrutiny.
The Swiss haven’t heard from Marcus
After the event, there was a big reveal. Facebook had reportedly kept the Swiss regulators in the dark. This is ironic, because just yesterday, Marcus had informed the Senate that Libra would be overseen by the Swiss data protection agency.
In part, he had stated, “For the purposes of data and privacy protections, the Swiss Federal Data Protection and Information Commissioner (FDPIC) will be the Libra Association’s privacy regulator.”
However, as reported by news outlet CNBC, Hugo Wyler, Head of Communication at the FDPIC, responded that there hasn’t been any communication between Facebook and the agency. He said, “We have taken note of the statements made by David Marcus, Chief of Calibra, on our potential role as data protection supervisory authority in the Libra context. Until today we have not been contacted by the promoters of Libra.”
The agency official added that such communication is still anticipated, as there won’t be any compliance if they don’t understand the project. So far, this hearing has shown that Facebook has a long way to go if it plans on getting approval from Congress. It’s still early days but it looks more unlikely that the regulators would greenlight Libra.