Libra, Facebook’s new cryptocurrency, is awaiting a hearing before the U.S. Senate Committee on Banking, Housing, and Urban Affairs. The July 16 meeting will be held at 10 a.m. EST, and as of yet, no information about witnesses has been released. The hearing will be broadcast to the public.
The goal is to examine “Facebook’s Proposed Digital Currency and Data Privacy Considerations.” Libra’s features, business plan, and potential risks will undergo close scrutiny at the hands of the Congress members, and any further work on Libra will likely be delayed.
Facebook characterized Libra as a “global currency and financial infrastructure,” a digital asset powered by Facebook’s new version of blockchain. Facebook claims its ambition with Libra comes down to reaching 1.7 billion people worldwide who still don’t have access to a bank account.
Still, the Banking Committee has met Facebook’s seemingly altruistic plan with caution. In an open letter they published last month, the Committee demanded answers about Facebook’s work on Libra: how it works, and whether Facebook sought any input from market watchdogs and regulators before putting it in motion.
Even before Facebook went public with its vision for a global cryptocurrency, it sparked the interest of the Congress with its social media monopoly. Together with Google, Facebook controls 82% of the digital advertising market. This monopolization has triggered an antitrust investigation that will dig deep into Facebook’s Google’s, and Amazon’s anti-competitive behavior.
Currently, banks and financial institutions have limited access to personal information and data. If Facebook, a company which holds more personal data than most governments, establishes Libra, it will significantly diminish other organizations’ chances at the consumer payment market. Facebook’s Libra project threatens to increase its monopolistic efforts to the financial market exponentially, in keeping with Facebook’s monopolistic business style.
Still, killing off payment market competitors is not the officials’ only concern. Privacy has become a burning issue after a series of data theft and data leakage controversies, and the Cambridge Analytica scandal. Its insight into consumer purchasing habits and patterns is unprecedented; if Facebook successfully mints its own coin, the public would get a chance to witness the greatest anti-competitive trust case in history.
Following today’s news on U.S. Senate Committee on Banking, Housing, and Urban Affairs hearing, committee member and 2020 presidential candidate Sen. Elizabeth Warren tweeted: “Facebook has too much power and a terrible track record when it comes to protecting our private information. We need to hold them accountable—not give them the chance to access even more user data. #BreakUpBigTech.”