Today, Facebook founder Mark Zuckerberg took part in hearings at the Financial Services Committee in the US Congress, where he tried to respond to fierce criticism of the Libra cryptocurrency.
Mark Zuckerberg answered questions from congressmen concerned about the creation of the Libra cryptocurrency. The hearings were opened by Maxine Waters, chair of the House Financial Services Committee. Her speech sounded extremely harsh, reports Financial Times. Waters accused Facebook of many shortcomings and failures, primarily in the inability to resist the spread of political propaganda in social networks, and concluded that these challenges must be addressed before launching such a large project as Libra. After Waters, the word passed to Zuckerberg, and then to Committee members. Criticism sounded from both the Democrats and Republicans.
One of the questions touched the issue of personal data privacy. Earlier Facebook received a fine of $5 billion for actions that entailed the leak of personal data to the British company Cambridge Analytica. According to Zuckerberg, in the near future the company will launch a new privacy protection system, which involves regular audits and reporting on measures taken.
Zuckerberg showed his determination to continue to develop the Libra crypto project. One of the first compromises he agreed to make was to limit the basket of fiat currencies to which cryptocurrency would be tied.
“I think it would be completely reasonable for our regulators to impose a restriction that says it has to be primarily US dollars.”
Zuckerberg also noted that Facebook would not launch Libra without getting green light from the US regulatory authorities. If other members of the Libra Association decide to launch the project without US approval, then Facebook will quit the association, Zuckerberg added.
Republican Andy Barr was among those who spoke in defense of the Libra crypto project. He noted that authorities should not restrain innovation in financial services. According to him, congressmen prefer to criticize, but cannot create anything. Then Barr added that Zuckerberg should not introduce excessive censorship of political advertising on social networks or prohibit, for example, advertising in support of President Donald Trump.
One of Zuckerberg’s arguments in defense of the Libra crypto project was the confrontation with China. According to Zuckerberg, blocking Libra will make China be able to become the first in this race by issuing its own digital currency.
“This "digital renminbi" would be "part of their Belt and Road initiative, their kind of foreign and economic policy to grow influence in Asia and Africa and other areas. Libra is going to be backed mostly by dollars and I believe that it will extend America's financial leadership around the world, as well as our democratic values and an oversight,” Zuckerberg suggested.
According to Dan Ives, a tech analyst at Wedbush, Facebook's cryptocurrency project cannot survive without support of other technology and payment giants.
“It is unlikely Facebook can succeed without partner support, as the company lacks the infrastructure to handle a project of this magnitude in our opinion.”
Some major members of the Libra association, such as Visa, Mastercard, Uber, PayPal, have already left the project, and global regulators expressed concerns that Libra carries a risk to the global financial system and could complicate fight against money laundering.