Facebook, Zuckerberg Dig In for Long Haul on Cryptocurrency
October 23 2019 - 1:07PM
Dow Jones News
By Peter Rudegeair and Ryan Tracy
Facebook Inc. CEO Mark Zuckerberg said the social-media giant
would soldier on with plans to help create a cryptocurrency-based
payments network, despite requests from some lawmakers to mothball
the project until Congress had a chance to examine it further.
In testimony before the House Financial Services Committee on
Wednesday, Mr. Zuckerberg defended Facebook's goal to offer
financial services to more than a billion consumers around the
world through libra, a digital coin designed to be used to buy
things online and off and send money domestically and overseas,
while acknowledging the risks to meeting that goal.
"I actually don't know if libra is going to work," Mr.
Zuckerberg said. Still, he pledged to refrain from participating in
libra's launch anywhere in the world unless U.S. regulators
approved of it.
Since Facebook announced its vision for libra in June with a
group of 27 other companies, U.S. legislators and regulators have
voiced concerns about its effect on financial stability and data
privacy. European officials have tried to halt its launch.
That criticism continued Wednesday, with many Democrats and some
Republicans blasting the project. Other GOP lawmakers praised
Facebook for trying to innovate.
"As I have examined Facebook's various problems, I have come to
the conclusion that 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," said
Rep. Maxine Waters, the Democratic chairwoman of the committee.
Rep. Patrick McHenry (R., N.C.), the committee's top Republican,
said he had his "own qualms about Facebook and libra and the
shortcomings of Big Tech." But, he added, "if history has taught us
anything, it's better to be on the side of American
innovation."
Mr. Zuckerberg also heard rebukes about Facebook's credibility
broadly, which underpin many Washington policy makers' concerns
about its move into financial services. The company has been
harshly criticized for its handling of users' personal data and its
role in the spread of misinformation.
"Have you learned that you should not lie?" asked Rep. Nydia
Velazquez (D., N.Y.), pointing to a fine Facebook paid European
regulators, who accused the company of providing misleading
information about its acquisition of messaging unit WhatsApp. Mr.
Zuckerberg said he disagreed with her characterization, but added,
"I understand that we have work to build trust on this."
Ms. Velazquez asked Mr. Zuckerberg to wait until Congress
created a new regulatory framework for libra before moving forward.
He responded that Congress already has oversight of the regulators
Facebook is working with and that he thought that was
sufficient.
The group of companies that Facebook assembled to launch libra,
the Libra Association, lost one-quarter of its original members,
including Visa Inc., Mastercard Inc. and PayPal Holdings Inc. Those
companies faced pressure from regulators and politicians to explain
how libra could be prevented from being used to launder money or
finance terrorism.
Rep. Ann Wagner (R., Mo.) asked Mr. Zuckerberg why those large
U.S. financial firms had dropped out of the project. "It's a risky
project and there's been a lot of scrutiny," he replied.
"Yes," Ms. Wagner said, "it's a risky project."
Write to Peter Rudegeair at Peter.Rudegeair@wsj.com and Ryan
Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
October 23, 2019 13:52 ET (17:52 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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