Facebook signals Libra cryptocurrency plans will move forward

Blockchain boss David Marcus stops short of agreeing to a moratorium.

Queenie Wong Former Senior Writer
Queenie Wong was a senior writer for CNET News, focusing on social media companies including Facebook's parent company Meta, Twitter and TikTok. Before joining CNET, she worked for The Mercury News in San Jose and the Statesman Journal in Salem, Oregon. A native of Southern California, she took her first journalism class in middle school.
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Queenie Wong
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Senate Banking Committee Holds Hearing On Facebook's Proposed Crypto Currency

Facebook executive David Marcus, who leads the social network's blockchain efforts, testified before the US House Committee on Financial Services on Wednesday.

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US lawmakers have called on Facebook to temporarily halt the development of a new cryptocurrency, but an executive for the social network signaled on Wednesday that the company still plans to move forward with the project.

Several lawmakers who sit on the US House Committee on Financial Services asked Facebook's blockchain boss, David Marcus, if the company would agree to a moratorium on Libra until Congress and regulators can examine concerns around cryptocurrency.

While Marcus said the social media giant would "take the time to get this right," he stopped short of agreeing to a moratorium.

"The commitment is that we will not launch until we have addressed all concerns fully," Marcus said after he was repeatedly asked the same question.

The exchange was part of Marcus' second day of testimony before lawmakers about Facebook's cryptocurrency plans. Tensions between the social network and Washington have been increasing as Facebook tries to expand its reach after a series of scandals. The company is working with 27 partners to launch Libra in 2020, and it's building a digital wallet, called Calibra, to store the currency. On Tuesday, lawmakers expressed their distrust of Facebook given its bad track record around privacy and security.

The Federal Trade Commission is expected to fine Facebook a record $5 billion for its privacy mishaps. 

Lawmakers reiterated their concerns about Libra and Facebook's scandals on Wednesday during a lengthy hearing that spanned more than four hours.

"Facebook's proposed entry into financial services is all the more troubling because it has already harmed vast numbers of people on a scale similar to Wells Fargo, and demonstrated a pattern of failing to keep consumer data private on a scale similar to Equifax," said Rep. Maxine Waters, a California Democrat who chairs the House Committee on Financial Services.

Rep. Carolyn Maloney, a Democrat from New York, asked Marcus if Facebook would agree to run a small pilot program with no more than 1 million users that's overseen by the Federal Reserve and the US Securities and Exchange Commission. Marcus said the social network would continue to engage with regulators.

"I think that Congress should seriously consider stopping this project from moving forward," Maloney said after Marcus' response.

The committee is looking at draft legislation called the Keep Big Tech Out Of Finance Act that would prohibit large tech companies like Facebook with at least $25 billion in revenue from issuing digital currencies.

Lawmakers have numerous concerns about Libra, including the potential for money laundering, but some thought the hearing was premature. It was clear, though, there are still a lot of unanswered questions about Libra.

Rep. Sean Duffy, a Wisconsin Republican, asked Marcus if people banned from Facebook, such as far-right commenters Milo Yiannopoulos, will be able to use Libra. Marcus said he didn't know the answer to that question yet.

"Personally, I believe that we shouldn't be in the business of ... deciding what people can do with their money or not," Marcus said. "But that being said, this is an important question, and we need to be thoughtful about the policy."

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