At a Senate hearing conducted on Tuesday, the US lawmakers slammed Facebook’s upcoming digital cryptocurrency Libra, calling it “delusional” and “dangerous” and directing the social networking giant to clean up its house first before launching a new business model.
David Marcus, Head of Facebook subsidiary Calibra, was heavily grilled at the Senate Banking Committee.
Democrat Senator Sherrod Brown who began the hearing lashed into Facebook, saying it was “delusional” to think people would trust it with their hard-earned money.
“We’d be crazy to give them a chance to let them experiment with people’s bank accounts,” said Brown, adding that “like a toddler who has gotten his hands on a book of matches, Facebook has burned down the house over and over and called every arson a learning experience.
Republican Senator Martha McSally echoed his views: “Instead of cleaning up your house, you are launching a new business model.”
Marcus said Facebook “will only build its own Calibra cryptocurrency wallet into Messenger and WhatsApp”.
Marcus told lawmakers that Libra – controlled by a non-profit called the Libra Association — will comply with all US regulations and unless all concerns are answered, would not be launched.
Earlier on Monday, US Treasury Secretary Steven Mnuchin said he was “uncomfortable” with Libra. US Federal Reserve Chair Jerome Powell has also raised “serious concern” over Libra.
Marcus, in a prepared testimony, said the Libra Association would be regulated by the Swiss government because that’s where it’s headquartered.
“The Libra Association expects that it will be licensed, regulated, and subject to supervisory oversight. Because the Association is headquartered in Geneva, it will be supervised by the Swiss Financial Markets Supervisory Authority (FINMA),” Marcus wrote.