Ahead of the launch of its new global cryptocurrency, Facebook (FB – Get Report) sent its crypto chief David Marcus to the Senate Tuesday to face questioning from the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
The mixed reaction Marcus received among senators was mostly divided along party lines, with some of the toughest questioning coming from Democratic Senators still skeptical of the company in the wake of the Russian election hacking scandal that Democrats blame for their candidate’s loss in the 2016 presidential election.
Download Now: To be a profitable investor you first need to know the rules. Get Jim Cramer’s 25 Rules for Investing Special Report
Senator Mark Warren (D-VA) stated that “Facebook has a history of buying or copying competing technologies,” before demanding that Marcus assure the panel that competing digital wallets wouldn’t be hindered on WhatsApp and Messenger, two of Facebook’s most popular products.
Marcus went back and forth with Warner before assuring Warner that users would be able to send and receive non-Libra digital currencies on Facebook’s networks. But Marcus would not commit to embedding those competing currencies on its platforms.
Senator Sherrod Brown (D-OH) baldly stated that “Facebook is dangerous,” saying that the company has continued to misuse customer data while continually referring to each instance as a “learning experience.”
Brown concluded his remarks by saying that “it takes a breathtaking amount of arrogance to look at that record” and believe that the next move for the company should be to create a digital currency.
Republican Senators were more forgiving for the most part, with Committee Chairman Mike Crapo (R-ID) applauding the company’s efforts to provide financial services for the under-banked.
“I want to make clear that we are only at the beginning of this journey,” Marcus said. “We expect the review of Libra to be one of the most extensive ever. Facebook will not offer the Libra currency until we have addressed the concerns and receive appropriate approvals.”
Marcus also stated the Calibra network will have the “highest standards” when it comes to privacy and that the social and financial data will be completely separated.
Users will have to provide an authentic government ID so sign up for Calibra and will not be able to register by simply using their existing Facebook profiles.
Marcus stressed Calibra’s independence from Facebook, stating that the company has taken the lead in developing the technology but that it would give up the lead once the digital currency is launched.
“We will not control Libra and will be one of over 100 participants that will govern over the currency,” Marcus said. ” We will have to gain people’s trust if we want people to use our network over the hundreds of competing companies.”
Facebook shares were up 0.18% to $204.27 on Tuesday early afternoon and are up more than 55% this year.
By: Tony Owusu