Only a year after testifying before Congress over privacy issues related to Facebook’s malicious misuse of data, Mark Zuckerberg will once again appear before Congress to discuss the company’s plan of introducing its cryptocurrency project.
As increasing regulatory and political pressure piled on the already impressive feats of privacy breaches, Representative Maxine Waters announced that Facebook’s CEO is set to testify before the House Committee on Financial Services on 23 October. The Californian Democrat made the announcement public on Wednesday, an event that was already rumored to happen in Q4 2019.
Aside from the plan of launching Libra, Zuckerberg will have to explain the company’s position on housing as well. In March 2019, Facebook signed a signal settlement where it agreed to upgrade its advertisement systems to put a stop to discrimination towards employment, credit, and housing advertisements.
Concerning the global cross-border digital asset, policymakers from both the Republican and Democrat party placed strong pressure on the company. Notably, the Federal Reserve Chairman Jerome Powell and Treasury Secretary Steve Mnuchin heavily criticized the company’s intention to launch a global cryptocurrency, as they are concerned that the asset may be used illegally in cases such as drug trafficking and money laundering.
Furthermore, there are growing concerns that the fund reserve behind Libra may supersede the U.S. Federal Reserve and potentially destabilize the global economy. Officials from the European Union share similar views and have publicly stated last month that the currency will not launch on European soil.
Facebook has officially responded to Maxine Waters’ announcement, stating that Mark Zuckerberg ‘looks forward to testifying before the House Committee on Financial Services and responding to lawmakers’ questions.’
As a reminder, the Committee led by Maxine Waters has previously placed strong pressure on the project, going as far as to demand that Facebook ceases the project’s progress for the time being. The request was made in July this year, and the House of Democrats warned the company that they would introduce regulations that would block tech giants from entering the financial sector.
Representative Waters said that the cryptocurrency represents a new financial system based in Switzerland and stated that it might become too big to fail if regulations are not introduced before the product’s launch.
Libra’s fate uncertain as the Association starts to fall apart
While representatives from the Libra Association held a meeting with officials from a number of Central Banks in Switzerland, numerous EU politicians criticized the project at the time. France and Germany were the first nations in Europe to publicly disclose their opinion on Libra’s potential launch. The French Minister of Finance Bruno Le Maire stated at the time that the EU will not allow Libra and similar cryptocurrencies in Europe, as they threaten the monetary stability of the continent.
Commenting on the regulatory scrutiny, the head of Libra and former president of PayPal David Marcus stated in July that the project will not launch before it is approved by all relevant regulators. Marcus mentioned that the Libra Association will protect private user data as well.
Analysts believe that Facebook represents the reason behind the project’s uncertain future as it has a controversial past. However, Marcus stated that the focus should not be placed on Facebook as there are 27 more founding members that support the development of Libra. Despite his reasoning, the argument is falling apart as PayPal recently announced that it will no longer support the project. To make matters worse, a number of U.S. policymakers recently sent a letter to significant members such as Visa and Mastercard, imploring them to follow the steps of PayPal and leave the Association.