- Facebook’s blockchain lead, David Marcus, went before the U.S. Senate to answer questions on Facebook’s coming crypto, Libra
- Senators addressed ongoing concerns tied to Facebook, including a lack of trust in the company’s word and the fallout from privacy scandals
- Marcus will be back before lawmakers tomorrow to answer questions in the U.S. House of Representatives
Facebook’s David Marcus faced a cacophony of fear, uncertainty and doubt surrounding the social media giant’s plan to launch its digital currency Libra during a Senate hearing Tuesday, following criticisms from a wide range of regulators and lawmakers around the globe.
Ohio U.S. Sen. Sherrod Brown set a fiery tone at the beginning of the two-hour hearing, calling Facebook “dangerous” and unworthy of Americans’ trust. Indeed, his remarks kicked off the skeptical line of questioning, which focused heavily on Facebook’s historical missteps in privacy rather than the specifics of the crypto project itself.
“Facebook has demonstrated scandal after scandal that it doesn’t deserve our trust,” said Brown.
“I don’t trust Facebook’s repeated deceit,” U.S. Sen. Martha McSally of Arizona said. “And I am not alone.”
Marcus stuck to the Facebook talking points, noting once again that Facebook is not the sole member of the so-called Libra Association backing the crypto and that other members — including the likes of PayPal and Visa — would keep the company’s power over the network in check.
Ahead of the hearing, he clarified that Facebook has no intention of competing with sovereign currencies, and plans to work with the Federal Reserve to ensure it won’t affect monetary policy. Still, lawmakers said they were unconvinced that this good intention would be enough to deter negative consequences.
Senators including Republican John Kennedy expressed concerns about the Association banning individuals who hold certain political views, while N.J. Sen. Bob Menendez showed up to the hearing with a list of reasons why Facebook shouldn’t be trusted.
Marcus was brief in his remarks responding to allegations of Facebook’s privacy scandals and ties to Russian interference into the 2016 election, noting only that the firm had made mistakes in the past but has since invested in a number of programs to fix those problems.
“It’s pretty hard to trust you with a worldwide currency that you are setting up in Switzerland,” retorted Senator Brown. “You’re the only one with 2 billion people.”
Aside from lawmakers’ concerns about Facebook’s ties to the crypto, senators also had questions about the structure of Libra and the Association backing it.
Senator Mark Warner of Virginia, for instance, asked Marcus whether other wallets built on the Libra blockchain would be interoperable and have equal access to the blockchain as Calibra’s wallet. Marcus confirmed that would be the case. Marcus offered minimal details about how the Libra Association would handle conflicts of interest between its members, as well as the emergence of factions.
“It seems possible in any board, in any group of humans, people develop coalitions,” said Sen. Tina Smith. “It seems to me there’s a big question on how every voice is going to be heard in this incredibly powerful association headquartered in Switzerland. Is this going to be like a corporate board? How will you handle conflicts of interest?”
In response, Marcus said the association shared its white paper early on to garner the necessary feedback, and that there was still “a lot of work to do between now and the launch.”
Still, some feedback was hopeful amid the caution. U.S. Sen. Pat Toomey advocated for “tremendous benefits” of blockchain technology and cryptocurrencies.
“We should consider the benefits and the risk,” he said. “But to announce in advance that we need to strangle the baby in the crib seems premature.”
In response to prodding by Sen. Brown, Marcus also said he trusted Libra so much that he would accept 100% of his pay in the yet-to-launch cryptocurrency.
The House won’t be left out, with its Libra hearing scheduled for tomorrow, asking Marcus to do it all over again in just 24 hours.