US lawmakers challenge Facebook over Libra plan

WASHINGTON: US lawmakers quizzed Facebook on Wednesday over its planned cryptocurrency, after a bruising first bout a day earlier when senators from both parties condemned the project, saying the company had not shown it could be trusted.

The social media company is fighting to get Washington on its side after it shocked regulators and lawmakers with its announcement on June 18 that it was hoping to launch a new digital coin called Libra in 2020.

It has faced criticism from policymakers and financial watchdogs at home and abroad who fear widespread adoption of the digital currency by Facebook’s 2.38 billion users could upend the financial system.

“I have serious concerns with Facebook’s plans to create a digital currency and digital wallet,” Maxine Waters, chairwoman of the Democrat-controlled House Financial Services Committee, said in her opening remarks. “If Facebook’s plan comes into fruition, the company and its partners will yield immense economic power that could destabilise currencies.”

Lawmakers are questioning David Marcus, the Facebook executive overseeing the project, who was grilled by the Senate Banking Committee on Tuesday over the possible risks posed by Libra to data privacy, consumer protections and money laundering controls. The panel has already circulated draft legislation that could kill the project by banning Facebook and other tech firms from entering the financial services space.