Facebook’s Cryptocurrency, Libra, Sparks Bipartisan Concern
Facebook’s Libra, a cryptocurrency has been receiving bipartisan backlash since its announcement last month. Washington lawmakers are skeptical about its legitimacy and coverage when it comes to money laundering, consumer protection and financial stability.
Facebook’s goal through Libra is to open online commerce to millions of people around the world for those who lack access to bank accounts and make it cheaper to send money and promises low fees.
Though it is planned to be released in 2020, Facebook’s battles go far beyond Libra. Facebook along with Google, Apple and Amazon are under the microscope for their impact on entrepreneurship of smaller companies and innovation. A House judiciary bipartisan subcommittee will investigate the four technology giants.
Timothy Wu, a professor of law, science and technology at Columbia Law School spoke about the reasons why he thinks Facebook should be broken up during an interview at the Aspen Ideas Festival last month.
Wu spoke about the acquisition of Instagram by Facebook and that Zuckerberg said in an e-mail that was disclosed by the New York Post boasting about the purchase of Instagram and he saw the company as a threat, to kill the competition.
“It is a felony under US law to buy companies that you believe are competitive threats to you,” Wu said about the inquisition of Instagram by Facebook.
Wu is among expert witnesses scheduled to appear before the antitrust panel, which will also feature executives of the four companies.
President Trump tweeted about cryptocurrencies on Thursday: “I am 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…”
Democrat representative of California, Maxine Waters and her committee drafted a bill that loudly opposed Facebook’s cryptocurrency and other technology companies as well. Waters believes that Libra and others like it might need a taxpayer bailout.
Facebook created a nonprofit oversight association, with partners including Uber, PayPal, Spotify, Visa and MasterCard to address privacy concerns.
Lawmakers want to put Libra in the same sight as other major banks with strict regulations if it launches publicly. They also want to make sure that it falls in line with the current banking policies put in place in the United States. Given its 2 billion users some problems may arise, as it can be tough to oversee that amount of traffic according to AP.
Facebook plans on spending two days on Capitol Hill in D.C.
At the hearing: “Facebook is dangerous, now Facebook might not intend to be dangerous. But, surely they don’t respect the power of technologies they’re playing with,” said Senator Sherrod Brown of Ohio.
Brown also added that “it doesn’t deserve our trust, it should be treated like the profit-seeking corporation that it is, just like any other company.”
Although Facebook’s Libra can change the way the world uses and accesses it, it may not be so easy to achieve.