Facebook has been aggressively pursuing its cryptocurrency, Libra, as Parentology reported earlier this year. Libra was initially intended to launch in 2020. But recent scrutiny of Facebook and its privacy policies by government officials combined with a loss of support from corporate backers is making that launch date seem less likely and leaving some wondering if Libra will ever come to fruition.
Republicans and Democrats may not agree on much, but the need to regulate big tech has become a bi-partisan issue. Facebook, specifically, has been under fire for its privacy practices and was given a historical fine earlier this year. The company remains under investigation by the Justice Department, the Federal Trade Commission, and the House Judiciary antitrust subcommittee.
Mark Zuckerberg will testify at a House Financial Services Committee hearing on October 23, 2019. Lawmakers on both sides of the aisle have expressed significant reservations about Libra and the implications it could have ethically and financially.
The ethical concerns for this new currency are that it lends itself to criminal activities like money laundering or drug trafficking. Financially, Libra would be backed by corporate supporters. Lawmakers are concerned that this financial support could have an adverse effect on the Fed and ultimately compromise the financial system.
Representative Maxine Waters, who is the head of the Financial Services Committee where Zuckerberg will testify, sent a letter to Facebook in July asking that they stop moving forward on the Libra project. For its part, Facebook has said that it would not launch Libra without all of the appropriate approvals from regulators, but it does not appear to be stopping any time soon.
“Libra is a stablecoin backed by corporations and based on US dollars,” Logan Golema, chief technology officer for Hercules SEZC told Parentology earlier this year. However, it now appears that some of Libra’s largest founding members and corporate backers are withdrawing from the project. PayPal, Visa, Mastercard, eBay, and Stripe have all recently pulled their support of Libra, making its launch even more precarious.
So the big question on everyone’s mind now is this: Will Facebook Libra succeed?
The upcoming hearings will address lawmakers’ concerns and allow Zuckerberg to explain Facebook’s position as they move forward with Libra. Although it has not yet happened, Congress does hold the power to legislate against technology companies getting involved in this kind of cryptocurrency. Facebook and its ancillary businesses will continue to be the focus of questioning as the government determines how to navigate and, possibly, legislate these new technological frontiers.