The US Senate Committee on Banking, Housing, and Urban Affairs held a hearing on Facebook’s Libra project this morning, with Facebook crypto chief David Marcus in the hot seat.
After a lengthy introduction by Idaho Senator Mike Crapo in which he called Facebook’s aims “commendable,” the committee discussed the potential ramifications of Facebook banking services.
And subjected David Marcus to an absolute grilling.
Cryptocurrency Might Earn Its Own Regulator
There is potential that the US government might appoint a new regulator to deal with cryptocurrencies, understanding that existing regulators aren’t fully equipped to deal with all the complexities. The entry of Facebook has spurred this idea, Mike Crapo revealed.
Crapo noted that the technology underlying Libra is “changing” and therefore regulators are uncertain how to approach it.
He then went on to say that the US government cannot enforce existing bank privacy laws on Facebook, and may have to establish a new regulator to handle the convergence of private data and financial information.
Existing regulators aren’t equipped for the type of power that Facebook wields – far greater than a traditional bank or money service provider. As Facebook’s financial services evolve, we may see a world of “social credit” translating into real credit, with the extensive information available to the company becoming more valuable than a credit report.
Ohio Senator Grills David Marcus on Libra
Senator Sherrod Brown was first to take the floor after the opening remarks, and he pulled no punches:
“Facebook is dangerous. Now Facebook might not intend to be dangerous, but surely they don’t respect the power of the technologies they are playing with.”
“Like a toddler who has gotten his hands on a book of matches,
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