Social media titan Facebook has had an abysmal privacy track record in recent years. Now, two senior congressmen in America’s upper legislative chamber, the Senate, are trying to ensure that track record isn’t extended to Facebook’s forthcoming cryptocurrency project.
On May 9th, Idaho Senator Mike Crapo and Ohio Senator Sherrod Brown, respectively the first and second ranked members of the Senate Committee on Banking, Housing, and Urban Affairs, sent a letter to Facebook founder and CEO Mark Zuckerberg asking for answers about how Facebook will ensure privacy around its crypto.
Specifically, the two senators said in their request that the social media company needed to clarify how its crypto would function and how Facebook would collect data around its use.
“The Wall Street Journal recently reported that Facebook is recruiting dozens of financial firms and online merchants to help launch a cryptocurrency-based payments system using its social network […] In addition, privacy experts have raised questions about Facebook’s extensive data collection practices […] Accordingly, please respond to the following questions.”
Afterwards, the senators posed seven questions for Zuckerberg. Some of their main thrusts included the following:
- How would the crypto work?
- Has Facebook reached out to regulators regarding the coin?
- What privacy protections have been put in place around the project?
- Will Facebook sell coin users’ data to “unaffiliated” third parties?
It’s unclear when Facebook will respond to the senators’ request for information, but it’ll be a key thread to watch in the cryptoverse going forward. Blockonomi will continue to track the situation as it develops.
What We Know About Facebook’s “Project Libra” Crypto So Far
Facebook has tried its best to maintain a shroud of secrecy around its cryptocurrency initiative, but a steady stream of reporting in recent months has painted a fairly clear picture about what the public can expect.
This spring, New York Times correspondents Mike Isaac and Nathaniel Popper and Mike Isaac confirmed with sources close to the situation that Facebook’s crypto was near enough to completion that the company had “held conversations with cryptocurrency exchanges about selling the Facebook coin to consumers.” The duo indicated the project could be released in the “first half of the year.”
Last December, Bloomberg first reported that Facebook was working on a stablecoin, i.e. a token fixed to a specific valuation. In March, Isaac and Popper advanced that reporting in revealing that Facebook was working on a “basketcoin” that would be pegged to multiple foreign currencies.
Last month, Popper confirmed that Facebook was seeking to raise $1 billion USD from venture capital firms to back the coin, potentially as collateral.
Then, one week ago, the Wall Street Journal reported that Facebook had given its in-house crypto project a codename of “Project Libra” and that the social media company had reached out to payments powerhouses like Visa and Mastercard to help back the project.
If Facebook can win over the support of such major players, then Project Libra could more easily prove to be a gamechanger in introducing millions of mainstream users into the cryptocurrency ecosystem.
With or without Visa and Mastercard, Facebook seemingly has big plans for its crypto. In the aforementioned WSJ report, the company was said to be creating an online checkout system that would allow Facebook users to spend the stablecoin on other sites.
The company was also said to be interested in paying Facebook users via Project Libra to watch ads on its platform, similar to how the Brave browser pays its users in Basic Attention Token (BAT) for doing the same.
Whatever ends up happening, it seems the cryptoeconomy will be seeing Project Libra enter the fray before the end of 2019.