Bipartisan Senators challenge Facebook's Libra crypocurrency

Pictured Above: Senator Sherrod Brown (D-IO) questioning Facebook's Libra project head. 

Senate Banking Committee Hearing

Yesterday, the head of Facebook’s digital currency project, David Marcus, was grilled by the Senate Banking Committee about the juggernaut’s 2020 release of its new cryptocurrency, Libra. ⁣

Yeah… Facebook is betting that the public outcry over their past security failures will be short-lived enough for them to create a product that is the ultimate test of security and trust.⁣

What they’re saying: David Marcus told the Committee that Facebook will have no special privilege of data among the 100 invested entities, and “For the purposes of data and privacy protections, the Swiss Federal Data Protection and Information Commissioner (FDPIC) will be the Libra Association’s privacy regulator.” ⁣

Sen. Sherrod Brown (D-OH) cautioned that “Facebook has demonstrated through scandal after scandal that it doesn't deserve our trust.” Then, he told the Libra project head to put his money where his coins are, urging the Facebook head to trust his own project enough to pledge to receive his salary in Libra. David Marcus said he would. ⁣

Sen. Pat Toomey (R-PA) sounded more optimistic. “It’s clear [Libra] could help us lower payment transaction costs, facilitate access to capital. They provide pseudonymity. They provide levels of security that other forms of currency have not.” Sen. Toomey offered that this “interesting iteration” of cryptocurrency could solve all these problems and “provide a diminished volatility by backing it with a basket of currencies.” ⁣

Referenced in the video: U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell both expressed “serious concerns” about money laundering, financial stability and regulation of Libra. ⁣

Side note: Libra should not be as volatile as other cryptos (cough, cough: Bitcoin), while being less of an investment and more of a transactional currency. ⁣

Big Picture: Libra may have an uphill battle with US regulators and Facebook’s public perception, but if Bitcoin was any indicator, people will still be anxious to invest. With robust and thoughtful regulation, these FinTech innovations could be transformative for the American public.