Facebook Inc. couldn’t ease the Senate Banking Committee’s fears about its proposed cryptocurrency Libra during a hearing on Capitol Hill, prompting key lawmakers to consider taking further steps — including legislation — to curb the tech giant’s digital financial ambitions.
David Marcus, Facebook’s lead on its digital currency project, told the Senate Banking Committee that he “can’t think of any reason” why the social media company would seek permission from consumers to use their data, striking at a major concern among Republican lawmakers and a bipartisan priority for the Senate Banking Committee. The panel’s chair, Sen. Mike Crapo (R-Idaho), opened the hearing with his concerns over Facebook’s track record on issues of data privacy.
And while Facebook has said it is committed to not moving forward with Libra and its digital wallet Calibra until it has addressed concerns from American and international regulators, Marcus did not confirm the same for senators, most notably in an exchange with Senate Banking ranking member Sherrod Brown (D-Ohio).
With concerns piling up, Brown said the Senate might work on legislation that would block Facebook’s digital currency ambitions.
“If they’re arrogant enough to just blast ahead on this — and this hearing today showed some inclination that they’re arrogant enough to blast ahead on this — legislation would absolutely be in order, and we’ll have strong bipartisan support,” Brown told reporters after the hearing.
Brown’s comments about possible legislation come after a media report Sunday indicated that a draft bill circulating in the House Financial Services Committee would prevent large technology companies from behaving like financial institutions or issuing digital currencies. Brown declined to comment on the House committee’s reported draft legislation.
Crapo reiterated calls for a comprehensive data protection law after the hearing: “This debate promotes the discussion of the broader issue I’ve been trying to get the entire congress engaged in.”
Concerns weren’t limited to data privacy.
Lawmakers also tried to pin down an answer from Marcus on which U.S. regulators would oversee Libra. Largely unregulated, cryptocurrency was described as the “wild West” by Sen. Thom Tillis (R-N.C.), and the uncertain regulatory environment also ranks among lawmakers’ top concerns about Libra.
Facebook has said that Libra operations would be based in Switzerland and supervised by Switzerland’s financial watchdog, although large functions of a digital wallet and cryptocurrency of the American tech giant could still be regulated by American agencies.
“This is not for me to say,” Marcus said when pressed by Crapo to identify specific regulators. Facebook has promised to wait until major regulatory concerns are addressed before issuing its digital coin.
Libra and Calibra have come under fire from all corners of Washington, including Federal Reserve Chairman Jerome Powell, the House Democrats who are floating legislation to halt the project, President Donald Trump and Treasury Secretary Steven Mnuchin.
Tuesday’s hearing continued that tension and failed to quell skepticism from both sides of the aisle.
“Facebook has said ‘just trust us,’” Brown said. “And every time Americans trust you, they seem to get burned.”
Andre Earls contributed.