Don’t let China beat US to it, Mark Zuckerberg says defending Libra digital currency before Congress
Facebook Chief Executive Officer (CEO), Mark Zuckerberg, faced an intense grilling from the United States lawmakers as he defended his proposed digital currency.
Libra has come under scrutiny as regulators around the globe expressed disapproval over the project.
The Libra dilemma continues as Zuckerberg’s lengthy testimony before the US lawmakers didn’t yield the expected result.
The US House of Representatives Financial Service Committee grilled Zuckerberg for hours at Capitol Hill in Washington DC, US.
The Libra project has been the subject of immense scrutiny since its announcement in June, and critics have suggested it could enable money laundering and terrorist financing, and empower companies to abuse users’ transactional data.
That scrutiny recently led to several of Facebook’s major payment partners, including PayPal, MasterCard, Visa, and Stripe, dropping their support for the project.
Maxine Waters, Democrats chairwoman of the panel began the cross-examination of Libra which she had previously called for its abolition.
She pointed out Facebook’s failings in curbing discriminatory ads and protecting user’s privacy.
She further questioned Facebook’s policy of not subjecting ads by political candidates to third-party scrutiny and the social network giant involvement in Russian interference with the US 2016 election.
Waters said, “It would be beneficial for all if Facebook concentrates on addressing its many existing deficiencies and failures before proceeding any further on the Libra project.”
Republican congresswoman for Missouri, Ann Wagner, revealed Facebook’s plan for new encryption on its Messenger app.
This will, however, make it difficult for authorities to prevent child sexual abuse committed on the app, she argued.
Its other social networks like Whatsapp and Apple’s iMessage also came under scrutiny, as experts have expressed concern over child safety on the network apps.
Wagner also inquired why some of Libra’s founding members quit the crypto project.
Zuckerberg acknowledged Libra is a “risky project” but reassured the lawmaker the currency won’t launch without US regulatory approval.
“If we don’t receive the clearance, we won’t be part of the association,” he said.
He added that the company would be “forced” to abandon the Libra Association, the consortium that governs the project if the 21 members chose to proceed regardless.
“Of course, as a big company, we’re not going to do something that isn’t regulated or is decentralized,” said Zuckerberg, apparently contradicting the original mission statement for Libra.
Facebook CEO explained the vision of the Libra project is to make it easy to send money to anyone. “As easy and cheaply as sending a text message,” he said.
He admitted the need to resolve many of the existing issues surrounding the social network currently. But stated the social network giant would be one of the five governing boards.
He called Libra an “American innovation” and canvas for its approval so others like China don’t beat it to it.
Having reviewed the Congressmen’s concerns, it can be concluded that Facebook’s Zukerberg has to provide more evidence that it has the capability to supervise this project.
Also, Facebook has to show that it has what’s needed to prevent an occurrence like those presently associated with Facebook and most importantly prevent the new initiative from been used for terrorist and unlawful activities.