US lawmakers on both sides of the corridor were asked to fire Facebook Inc. on its cryptocurrency plans on Tuesday, as the project continues to draw intense scrutiny from financial regulators and politicians around the world.
Facebook is fighting a rearguard action to bring Washington on board after shocking legislators and legislators with an announcement on June 18 that they hoped to launch a new digital currency called Libra in 2020.
Since then, he has faced criticism from policy makers and financial control bodies at home and abroad that fear a widespread adoption of the digital currency by the social media giant that has a value of 2 , 38 billion users that could weaken the financial system.
"Facebook has shown through the scandal after the scandal that it does not deserve our trust," said Democratic Senator Sherrod Brown, the ranking member of the Senate banking committee, in his opening remarks. "We'd be crazy to give them the chance to experiment with people's bank accounts."
Critics have expressed anger that the company has pushed so much into its plans for such a potentially innovative project without much input from policy makers, especially when it is already in the spotlight on privacy issues.
The banking committee is interviewing David Marcus, the top executive of the company that oversees the project, on issues ranging from how Libra could influence global monetary policy to how customer data will be managed.
Marcus, president of PayPal from 2012 to 2014, tried to allay the concerns in his opening remarks by promising that Facebook will not start offering the Libra until the regulatory issues are addressed.
"We know we have to take the time to do it the right way," said Marcus, who is also about to testify before the House financial services committee on Wednesday.
Marcus is likely to receive an icy welcome from other Democratic legislators who already believe that society is too big and uncaring with consumer data.
It is also likely that he will face Republican skepticism after US President Donald Trump and Treasury Secretary Steven Mnuchin expressed concern.
"They will have to convince us of very high standards before they have access to the US financial system," said Mnuchin on Monday.
Under the casings
Facebook has assigned a small portion of its vast workforce to work on the project, Kevin Weil, who runs the product for the Libra initiative, told Reuters on June 18.
A former employee told Reuters that the company tried to keep the project under control even internally – the staff who were not involved knew little about it, not even operating under the Libra name.
The rumors had already emerged last year that Facebook was working on a digital currency, but the news that the project was in its advanced stages began to emerge only in the last few months.
In the weeks leading up to the announcement, the company began formally contacting key regulators, including the Federal Reserve, the Treasury and the Commodity Futures Trading Commission. But two people with knowledge of the discussions said that the conversations remained vague, with key details of the project discussed only theoretically.
Some lawmakers specializing in financial services policy have been frustrated by Facebook's lack of clarity before and since June 18, reported three congressional sources.
For example, the Republican and Democratic chief of the Senate banking committee sent a letter to Facebook on May 9 for information, including how the company would protect consumers' financial information. But Facebook did not respond until July 8, the committee said.
After receiving the response, the Democratic leader in the panel, Senator Sherrod Brown, said in a statement that he still needed "real answers".
A democratic aide described the company's contacts with legislators as "inept and entitled".
In his defense, Facebook stated that it had announced the project in its initial stages to get feedback from stakeholders.