Senate Hearing to Explore Facebook’s Libra Project

Well, that didn’t take long! The U.S. Senate Committee on Banking, Housing, and Urban Affairs will hold a hearing about Facebook’s Libra project on July 16, 2019. Reuters reported that the hearing will explore the Libra project as well as any data privacy considerations it may raise.

This comes after Senate Banking Committee members wrote to Facebook asking for information on rumors about its cryptocurrency project in May of 2019. The Committee wanted to know how Facebook would protect consumer information.

Senator Sherrod Brown (Democrat – Ohio), ranking member of the Senate Committee on Banking, Housing, and Urban Affairs wrote “This new cryptocurrency will give Facebook competitive advantages with regard to collecting data about financial transactions, as well as control over fees and functionality”. He continued:

“Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight. I’m calling on our financial watchdogs to scrutinize this closely to ensure users are protected.”

In addition, Representative Maxine Waters, (Democrat – California) Chairwoman of the U.S. House of Representatives Committee on Financial Services posted a statement about Facebook’s cryptocurrency. She wrote “I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action. Facebook executives should also come before the Committee to provide testimony on these issues.”

My best guess is that Facebook failed to consider that creating its own cryptocurrency could result in questions from legislators. Either that, or Facebook decided it was better to ask forgiveness than permission with Libra.