Facebook’s track record should stand in the way of it launching a digital currency, US lawmakers said on Tuesday, labeling the firm’s plan for the Libra crypto unit “delusional” and “crazy”.
“Facebook has demonstrated through scandal after scandal that it doesn’t deserve our trust,” Democratic senator Sherrod Brown, the ranking member of the Senate Banking Committee, said at a hearing in Washington, Reuters reports.
“We’d be crazy to give them a chance to let them experiment with people’s bank accounts.”
Brown added during questioning that he thought it was “delusional” to think individuals would trust the social media company with their “hard-earned” money.
The hearing came after Facebook announced on June 18 that it aims to launch a cryptocurrency called Libra in 2020.
Before announcing its Libra plans, Facebook was already facing a backlash over mishandling user data and not doing enough to prevent Russian interference in the 2016 US presidential election.
David Marcus, the company’s top executive overseeing the project, testified on issues ranging from how Libra could affect global monetary policy to how customer data will be handled.
He received a frosty welcome from Democratic lawmakers and several Republicans, who shared many of the same concerns.
“I don’t trust you guys,” said Republican Senator Martha McSally. “Instead of cleaning up your house you are launching into a new business model.”
Marcus, who was president of PayPal from 2012 to 2014, tried to assuage concerns by promising that Facebook will not begin offering Libra until regulatory issues are addressed.
“We know we need to take the time to get this right,” Marcus told lawmakers.
Senators raised a range of concerns, including about how the company plans to prevent money laundering, how consumers’ data and funds will be protected and how the Geneva-based association created to run the system will be regulated.
“I know we have to earn people’s trust for a very long period of time,” Marcus said when asked whether consumers can trust Facebook not to share their payment information.
The social media company has pledged that its payments subsidiary called Calibra will only share customer data with Facebook and external third parties if it has consent, or in “limited cases,” where it is necessary.
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