The founder and CEO of Facebook Mark Zuckerberg, appeared before the US House of Representatives Financial Services Committee last Wednesday with the intention of reassuring them about the good aspects of Libra. But the four-hour long session extended beyond that scope and spread into topics like political bias, fact-checking, and the Cambridge Analytica data scandal.
Both Republican and Democratic lawmakers took the opportunity to point out the failures of Facebook regarding issues like online child exploitation, hate speech, political misinformation, and data privacy lapses. Zuckerberg struggled to answer the multiple straightforward questions directed at him and at the end of the day, it was easy to forget that the focus was supposed to be on Libra.
Some of the comments about cryptocurrencies, including those of Rep. Brad Sherman from California, left Zuckerberg speechless. “For the richest man in the world to come here and hide behind the poorest people in the world, and say that’s who you’re really trying to help,” Sherman said. “You’re trying to help those for whom the dollar is not a good currency – drug dealers and tax evaders.”
Sherman questioned Zuckerberg’s claim that Libra would provide a solution for those excluded from the current international financial systems. “The U.S. dollar is an excellent currency as a means of account. It serves all the needs except that it’s really bad for tax evaders, drug dealers and terrorists. That unmet need can be met by cryptocurrency,” he further added.
“I actually don’t know if Libra’s going to work,” Zuckerberg admitted in his opening remarks. He repeatedly relied on the Libra Association’s independence from Facebook to avoid giving substantial answers to some questions. His assertion that the Facebook no longer controls the project left many of the lawmakers frustrated.
He said that some partners have left Libra as “it’s a risky project and there’s been a lot of scrutiny.” He also mentioned that China will soon have its own version, so regulators shouldn’t block Libra.
In spite of his optimistic views and assurances that Facebook will not move ahead with Libra without earning explicit approval from US financial regulators, the members were not convinced. Zuckerberg also said that Facebook would be “forced to leave” the organization overseeing Libra if the group launches the digital currency without the necessary approvals.
Rep. Maxine Waters, the California Democrat who chairs the panel, said the Libra project and its companion digital wallet Calibra, “raise many concerns relating to privacy, trading risks, discrimination … national security, monetary policy and the stability of the global financial system.”
The focus remained on the multiple controversies that has enveloped Facebook since 2016 and at point Zuckerberg confessed, “We’re not perfect. We make a lot of mistakes.”
The proceedings have made the fact clear that Facebook has a lot of work left to do if Libra has to see the light of the day.