On Wednesday, senators convicted and criticized the proposed project of Facebook.
Facebook showed it is not to be trusted by investors, as US lawmakers agree and criticized the cryptocurrency plan for adding a new member to the digital coins.
On June 18, Facebook announced it will launch a new cryptocurrency called Libra in 2020 will add to the list of digital coins that surprised regulators and lawmakers.
After that event, the social media company is aggressive to get Washington on its side.
The approval of Libra gives extensive fear to over 2.38 billion Facebook users.
That is the reason why policymakers and financial watchdogs did not approve it because it might upset the financial system.
In an opening remark, Chairwoman of the Democratic-controlled House Financial Services Committee, Maxine Waters said, “I have serious concerns with Facebook’s plans to create a digital currency and digital wallet.”
In addition, she said, “If Facebook’s plan comes into fruition, the company and its partners will yield immense economic power that could destabilize currencies.”
Last Tuesday, the lawmakers in the House Financial Services Committee asked questions to Facebook Executive David Marcus.
The interrogation was about his management over the project and the probable risks by Libra to data privacy.
On Wednesday, the hearing in Congress was proving to be even tenser. Democratic Representative Brad Sherman stated, “We’re told by some that innovation is always good.”
Brad Sherman also believed the most innovative thing that happened is when Osama bin Laden came up with a creative idea.
The idea consisted of two flying airplanes into the towers that may cost harmful events.
The idea was referred to CEO of Facebook, Mark Zuckerberg, to testify to the committee as he could risk Facebook even more. Whereas Osama bin Laden also threatened America with airplanes.
A Designed Regulation to Forbid Facebook
The panel spread the draft legislation that might stop the project in prohibiting Facebook and some tech firms from entering the financial services space.
The Libra trial program was the idea of democratic representative Carolyn Maloney that pushed Marcus to make an attempt.
The trial happened with over one million users managed by US financial regulators, including the Federal Reserve.
Maloney said, “I don’t think you should launch Libra at all.”
He also added, At the very least you should agree to do this small pilot program.”
Marcus, as the president of PayPal from 2012 to 2014, did not pledge to a pilot. Instead, he eases the lawmakers by promising not to begin issuing Libra until addressing the regulatory concern.
Marcus stated, “We will take the time to get this right.”
He said that in order to get feedback from all stakeholders, the company should reveal the project at an early stage.
Both sides of the representatives had to interrogate Facebook.
The questioning was about Facebook to assure sufficient consumer protection. Also, preventing the cryptocurrency from using it for illegal activities such as money laundering or terrorist financing.
A digital wallet subsidiary known as Calibra will carry out compliance checks to customers who want to sign up.
Furthermore, Facebook entering financial services through Libra makes lawmakers worried. It is with questions on how Libra could be financially stable, and how will the company protect users’ payments data.