Markets are down, and so are the spirits of many cryptocurrency investors. But no matter how bad your portfolio looks, it’s probably less bruised than David Marcus, Facebook’s lead for the Libra cryptocurrency, after today’s dressing-down from U.S. lawmakers.
At a hearing of the Senate Banking Committee, the Calibra head was faced with a flurry of hostile questions from skeptical lawmakers, who compared Libra and its creator to arsonists and movie villains before accusing the media giant of “flagrant displays of bullshit.”
If you didn’t have time to tune in, here’s what you missed:
Facebook Promises Financial Libra-tion
The hearing opened with cautious optimism. Senator Crapo, a Republican from Idaho, began by expressing his hope that Libra could bring “material benefits, such as expanding access to the financial system… and providing cheaper and faster payments.”
But the hearing quickly went downhill, while Marcus did his best to focus on the positives. Libra will be extensively reviewed, he promised, and fully compliant with regulatory bodies. He touted the technology’s ability to give access to “a safe, secure, low-cost, and efficient way to move money around the world.”
Libra will also work with the Federal Reserve, without interfering with monetary policy, Marcus explained. Calibra will offer just one of many competing wallets for spending, receiving and saving the Libra currency and will not share transactional data with Facebook.
Privacy And Personal Data
But Facebook does not have a great track record when it comes to privacy, as Senators were quick to point out. Several pointed to past data scandals and privacy violations, the most recent of which caused Facebook to settle for a fine of $5 billion.
Asked if Facebook would seek consent for the use of wallet data, Marcus replied that there “is no intention to do so,” emphasizing the goal of facilitating transactions between small businesses and consumers. Evidently this response did not satisfy the Senators, who insistently demanded to know what user data protections would be in place.
Libra Promises Regulatory Compliance
Senator Crapo raised regulatory concerns about the new asset, prodding Marcus to agree that America should lead the world when it comes to establishing rules. Marcus also assured the Committee that Facebook and the Libra Association will be committed to following U.S. regulations: a difficult case to make, considering that the Association will be based in Switzerland.
Senator Toomey, one of the few members to recognize the “tremendous potential advantages in blockchain technology,” encouraged his colleagues to stay open-minded. “We should explore this with a prudent approach” he said, warning other Senators not to, “strangle this baby in the crib.”
In order to address concerns of competition and anti-trust regulation, Marcus also touted the competition that could emerge between different Libra wallets. While WhatsApp and Facebook Messenger would likely embed their own Calibra wallets, he said, other providers would also emerge.
Fix Your Own Shop
Asked about Facebook’s past mistakes, Marcus emphasized throughout the hearing that “We will take the time to get this right.”
That wasn’t enough for Senator Schatz (D-HI), who seized the chance to tear into the global social giant. “Maybe before you do a new thing, an enormously important thing, you should go ahead and first make sure you’ve got your own shop fixed,” he said.
As Marcus raised the failings of the legacy financial status quo, Schatz continued to press the attack. “Why Facebook?” he asked. “And why before you’ve fixed your own stuff?” To that barrage of questions, Marcus could only reiterate Facebook’s determination “to serve its customers.”
Facebook Burned Down the House
But that was kid-glove treatment compared to Senator Brown(D-OH), who raised the most hostile questions yet. “Facebook is dangerous,” Brown said. “[T]hey don’t respect the power of the technologies they are playing with, like a toddler who has gotten his hands on a book of matches, Facebook has burned down the house over and over, and called every arson a ‘learning experience’.”
Facebook “wreaks havoc on the rest of us” in their pursuit of profit, Brown added, accusing the company of being complicit in scandals ranging from Russian election meddling to facilitating the spread of genocidal propaganda in Myanmar.
Aiming his sights at Facebook’s founder, Brown added, “no one elected Mark Zuckerberg.”
The Spectre Of Facebook
Those were among the nicer things Senators had to say about Facebook. Chris Van Hollen (D-MD) compared the Libra Association to Spectre, the organization of global supervillains in the James Bond universe. While Bitcoin has a relatively small user base, Van Hollen pointed out, Facebook’s enormous userbase could raise huge concerns for the monetary system.
“When you’re talking about a world currency potentially being used by billions of people,” Senator Van Hollen said, “I’m not sure there is sufficient accountability you could build into that system.”
Senator Kennedy(R-LA) also joined in, criticizing Facebook for past negligence and for its growing role as a primary news-provider. “Truthful reporting has been displaced with flagrant displays of bullshit,” he said.
But at least Kennedy kept his sense of humor. “Facebook wants to control the monetary supply,” he said. “What could possibly go wrong?”