{"id":223247,"date":"2019-07-16T22:38:10","date_gmt":"2019-07-17T02:38:10","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=223247"},"modified":"2019-07-16T22:38:10","modified_gmt":"2019-07-17T02:38:10","slug":"facebooks-currency-plan-gets-hostile-reception-in-congress","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2019\/07\/16\/facebooks-currency-plan-gets-hostile-reception-in-congress\/","title":{"rendered":"Facebook’s currency plan gets hostile reception in Congress"},"content":{"rendered":"
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\u201cFacebook is dangerous,\u201d asserted Sen. Sherrod Brown of Ohio, the committee’s senior Democrat. Like a toddler playing with matches, \u201cFacebook has burned down the house over and over,\u201d he told Marcus. \u201cDo you really think people should trust you with their bank accounts and their money?\u201d (Pexels Photo)<\/figcaption><\/figure>\n

WASHINGTON \u2014 Under sharp criticism from senators, a Facebook executive on Tuesday defended the social network’s ambitious plan to create a digital currency and pledged to work with regulators to achieve a system that protects the privacy of users’ data.<\/p>\n

\u201cWe know we need to take the time to get this right,\u201d David Marcus, the Facebook executive leading the project, told the Senate Banking Committee at a hearing.<\/p>\n

But that message did little to assure senators. Members of both parties demanded to know why a company with massive market power and a track record of scandals should be trusted with such a far-reaching project, given the potential for fraud, abuse and criminal activity.<\/p>\n

\u201cFacebook is dangerous,\u201d asserted Sen. Sherrod Brown of Ohio, the committee’s senior Democrat. Like a toddler playing with matches, \u201cFacebook has burned down the house over and over,\u201d he told Marcus. \u201cDo you really think people should trust you with their bank accounts and their money?\u201d<\/p>\n

Republican Sen. Martha McSally of Arizona said \u201cthe core issue here is trust.\u201d Users won’t be able to opt out of providing their personal data when joining the new digital wallet for Libra, McSally said. \u201cArizonans will be more likely to be scammed\u201d using the currency, she said.<\/p>\n

The litany of criticism came as Congress began two days of hearings on the currency planned by Facebook, to be called Libra. Meanwhile, a House Judiciary subcommittee extended its bipartisan investigation of the market power of Facebook, Google, Amazon and Apple.<\/p>\n

On the defensive from bursts of aggressive questioning, Facebook’s Marcus indicated the currency plan is a work in progress. \u201cWe will take the time\u201d to ensure the network won’t be open to use by criminals and illicit activity like money laundering and financial fraud. \u201cWe hope that we’ll avoid conflicts of interest. We have a lot of work to do,\u201d Marcus said.<\/p>\n

He said the new venture would be headquartered in Switzerland, not to avoid oversight but because the country is a recognized international financial centre.<\/p>\n

The grilling followed a series of negative comments and warnings about the Libra plan in recent days from President Donald Trump, his treasury secretary and the head of the Federal Reserve.<\/p>\n

But some senators emphasized the potential positive benefits of Facebook’s plan, meant to bring money transacting at low cost to millions around the globe who don’t have bank accounts. Facebook had its strong defenders of the project, too, on the panel.<\/p>\n

\u201cTo strangle this baby in the crib is wildly premature,\u201d said Sen. Pat Toomey, R-Pa.<\/p>\n

In that vein, Marcus said Libra \u201cis about developing a safe, secure and low-cost way for people to move money efficiently around the world. We believe that Libra can make real progress toward building a more inclusive financial infrastructure.\u201d<\/p>\n

The planned digital currency is to be a blend of multiple currencies, so that its value will fluctuate in any given local currency. Because Libra will be backed by a reserve, and because the group of companies managing it will encourage a competitive system of exchanges, the project leaders say, \u201canyone with Libra has a high degree of assurance they can sell it for local (sovereign) currency based on an exchange rate.\u201d<\/p>\n

Promising low fees, the new currency system could open online commerce to millions of people around the world who lack access to bank accounts and make it cheaper to send money across borders. But it also raises concerns over the privacy of users’ data and the potential for criminals to use it for money laundering and fraud.<\/p>\n

To address privacy concerns, Facebook created a non-profit oversight association, with dozens of partners including PayPal, Uber, Spotify, Visa and MasterCard, to govern Libra. As one among many in the association, Facebook says it won’t have any special rights or privileges. It also created a \u201cdigital wallet\u201d subsidiary, Calibra, to work on the technology, separately from its main social media business. While Facebook owns and controls Calibra, it won’t see financial data from it, the company says.<\/p>\n

Senators demanded to know exactly what that separation will entail.<\/p>\n

\u201cFacebook isn’t a company; it’s a country,\u201d said Sen. John Kennedy, R-La. Kennedy and other conservative senators took the occasion to air long-standing grievances against Facebook, Twitter and Google for a perceived bias against conservative views.<\/p>\n

Facebook’s currency proposal has also faced heavy skepticism from the Trump administration.<\/p>\n

Trump tweeted last week that the new currency, Libra, \u201cwill have little standing or dependability.\u201d Both Treasury Secretary Steven Mnuchin and Fed Chair Jerome Powell have expressed serious concerns recently that Libra could be used for illicit activity.<\/p>\n

The Treasury Department has \u201cvery serious concerns that Libra could be misused by money launderers and terrorist financers,\u201d Mnuchin told reporters at the White House on Monday. \u201cThis is indeed a national security issue.\u201d<\/p>\n

Also Tuesday, across the Capitol in the House, the chairman of a Judiciary Committee panel investigating the market power of big tech companies said Congress and antitrust regulators wrongly allowed them to regulate themselves. That enabled companies like Facebook, Google, Amazon and Apple to operate out of control, dominating the internet and choking off online innovation, Rep. David Cicilline, D-R.I., said at the start of a hearing.<\/p>\n

\u201cThe internet has become increasingly concentrated, less open, and growingly hostile to innovation and entrepreneurship,\u201d he said.<\/p>\n

As concerns have mounted over data privacy and market dominance of Big Tech, an increasing number of lawmakers from both parties are calling for tighter regulation of customarily free-wheeling companies or even breaking them up. The Justice Department and the Federal Trade Commission are pursuing antitrust investigations of the four major companies.<\/p>\n

Executives of the companies, testifying at the Judiciary hearing, pushed back against lawmakers’ accusations that they operate as monopolies, laying out ways in which they say they compete fairly yet vigorously against rivals in the marketplace.<\/p>\n

And Google executive Karan Bhatia, at a Senate Judiciary subcommittee hearing on online bias, insisted that the company’s search engine does not filter on the basis of political views. \u201cWe surface the results that are most responsive,\u201d he said. \u201cWe don’t use political (markers) to blacklist or whitelist.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

WASHINGTON \u2014 Under sharp criticism from senators, a Facebook executive on Tuesday defended the social network’s ambitious plan to create …<\/p>\n","protected":false},"author":44,"featured_media":217850,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,17],"tags":[],"class_list":["post-223247","post","type-post","status-publish","format-standard","has-post-thumbnail","category-news","category-news-w","mauthors-marcy-gordon","mauthors-the-associated-press"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/223247","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=223247"}],"version-history":[{"count":1,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/223247\/revisions"}],"predecessor-version":[{"id":223249,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/223247\/revisions\/223249"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/217850"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=223247"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=223247"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=223247"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}