US legislators condemn CEOs currency plans and question whether Facebook should be broken up
Mark Zuckerberg faced hostile questioning in the US Congress from politicians of both parties as he sought to reassure them the planned digital currency Libra could be a force for good.
The more than six hours of testimony before the House financial services committee on Wednesday came as the social network faces calls from lawmakers to be broken up. While the event was intended to focus on Libra, House members used Zuckerbergs rare appearance to grill him on topics including political bias, fact-checking, and the Cambridge Analytica data scandal.
Libra, the digital currency developed by Facebook, was set to roll out in 2020 but has faced pushback from lawmakers, who have questioned how it would be regulated and expressed fears it could used for illicit activity or become vulnerable to privacy abuses. Several financial partners, including Mastercard, Visa, PayPal and eBay, have abandoned the project.
In his opening statement, Zuckerberg said that if the US did not allow the launch of a cryptocurrency, China would beat it to the field.
China is moving quickly to launch similar ideas in the coming months. If America doesnt innovate, our financial leadership is not guaranteed, he said.
Zuckerberg said Facebook would not back any move by the Libra Association, a consortium of 21 members including venture capital firms and not-for-profit groups, to launch the cryptocurrency until it had satisfied all US regulatory concerns. This signaled more caution than the company had agreed to before, but Zuckerberg sidestepped an attempt to pin him down on promising a moratorium on plans for Libra.
The Democratic congressman Brad Sherman of California criticized Zuckerbergs claims that Libra will help poor and unbanked people around the world enter the financial system.
The poor and unbanked need pesos, they need dollars that they can buy something at a local store, he said. Youve done no effort to help the unbanked anywhere else and any other time.
He said an anonymous currency was more likely to help drug dealers and other people seeking to circumvent traditional financial systems more than the poor and unbanked.
For the richest man in the world to come here and hide behind the poorest people in the world, and say thats who youre really trying to help, he said. Youre trying to help those for whom the dollar is not a good currency drug dealers and tax evaders.
Under fire before the 2020 election
Wednesdays hearing came in the wake of Facebooks recent disclosure that it had removed a network of Russian and Iranian accounts targeting US voters on Instagram, which it owns, and lawmakers refused to let Zuckerberg off the hook when it came to voicing concerns ahead of the 2020 presidential election.
The Democratic congresswoman Maxine Waters told the CEO: 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, Waters said.