The US lawmakers attacked Facebook’s upcoming digital cryptocurrency Libra at a Senate hearing here, calling it “delusional” and “dangerous” and directing the social networking giant to clean up its house first before launching a new business model.
David Marcus, Head of Facebook subsidiary Calibra, was grilled at the Senate Banking Committee on Tuesday, reports Tech Crunch.
Democrat Senator Sherrod Brown who began the hearing blasted Facebook, saying it was “delusional” to think people would trust it with their hard-earned money.
“We’d be crazy to give them a chance to let them experiment with people’s bank accounts,” said Brown, adding that “like a toddler who has gotten his hands on a book of matches, Facebook has burned down the house over and over and called every arson a learning experience.
Republican Senator Martha McSally echoed his views: “Instead of cleaning up your house, you are launching a new business model.” Marcus said Facebook “will only build its own Calibra cryptocurrency wallet into Messenger and WhatsApp”.
Marcus told lawmakers that Libra – controlled by a non-profit called the Libra Association – will comply with all US regulations and unless all concerns are answered, would not be launched.
Earlier on Monday, US Treasury Secretary Steven Mnuchin said he was “uncomfortable” with Libra. US Federal Reserve Chair Jerome Powell has also raised “serious concern” over Libra.
Marcus, in a prepared testimony, said the Libra Association would be regulated by the Swiss government because that’s where it’s headquartered.
“The Libra Association expects that it will be licensed, regulated, and subject to supervisory oversight. Because the Association is headquartered in Geneva, it will be supervised by the Swiss Financial Markets Supervisory Authority (FINMA),” Marcus wrote.
US President Donald Trump last week tweeted that he is not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.
“Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity,” Trump said.
“Similarly, Facebook Libra’s ‘virtual currency’ will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International.
“We have only one real currency in the USA, and it is stronger than ever. It is called the United States Dollar!” he further tweeted.
Facebook has said it is not going to launch its digital coin Libra unless regulators are fully satisfied and all necessary approvals are in place.
Under Facebook subsidiary Calibra, the social networking giant has planned to introduce a digital wallet for Libra. The wallet will be available on Messenger, WhatsApp and as a standalone app and is expected to be launched in 2020.