- The Washington Times - Wednesday, October 23, 2019

A bipartisan cadre of representatives grilled Facebook CEO Mark Zuckerberg on Wednesday about the company’s new cryptocurrency venture, Libra, and raised concerns about its ability to be used to enrich bad actors and act as an economic weapon.

Mr. Zuckerberg told the House Financial Services Committee that he viewed America’s financial infrastructure as “outdated” and that he was attempting to rethink what the modern financial infrastructure should be.

“I actually don’t know if Libra is going to work,” Mr. Zuckerberg told the committee. “But I believe that it’s important to try new things and, as long as you’re doing so responsibly, that’s what has made America successful and it’s why our tech industry has led the world.”

Libra is a prospective digital currency that intends to be governed by a nonprofit organization, the Libra Association, which lost several companies as charter members last week including Visa, Mastercard, and PayPal. Calibra is a Facebook subsidiary that will function as a digital wallet for the digital currency.

Mr. Zuckerberg was criticized from the left for Facebook’s entrance into the cryptocurrency realm before solving the company’s existing problems and for creating a new avenue for bad actors to enrich themselves.

Rep. Maxine Waters, California Democrat and the committee chair, called for a moratorium on Facebook’s digital currency efforts until after Congress had examined the issue, but Mr. Zuckerberg only committed to wait to launch the digital currency project anywhere until it received American regulators’ approval.

Rep. Brad Sherman, California Democrat, said that Libra would effectively become the “Zuck buck” and that Mr. Zuckerberg would be “making powerful burglary tools and letting your business partners commit the burglary.”

“I know that you’ve got at least a hundred lawyers who will tell you that what you’re doing is legal, and that you will be safe. But given the harm that this could do, they could be very wrong,” Mr. Sherman told Mr. Zuckerberg. “And if this explodes the way it might, especially, you will not be able to hide behind the idea that you didn’t create the Libra organization that it’s just your business partners that have wallets designed for drug dealers and terrorists.”

Republicans voiced similar concerns about the digital currency’s potential to cause harm, but did not appear to have already made up their minds about the digital currency’s function.

Rep. Bill Huizenga, Michigan Republican, agreed with his Democratic colleagues that Facebook and Libra were tools.

“It’s a neutral tool just like a car, a plane, a gun, a knife, all of which have been used as weapons for nefarious things at times and all [are] things that have been used to benefit,” Mr. Huizenga said. “These various tools are, in society though, regulated.”

Rep. Steve Stivers, Ohio Republican, said he was concerned that the establishment of a private currency such as Libra could undermine other currencies around the world.

“There are millions of people in the world who are hoping that your innovation works, but I think you may have bitten off more than you can chew by trying to create a private currency,” Mr. Stivers said.

Mr. Zuckerberg told the committee that while America was debating such issues, China was not waiting. He said if a Chinese financial system became the standard in more countries, then America’s desired sanctions, protections, and oversight would be impossible to impose retroactively.

“The goal of Libra is to build a global payment system rather than a currency,” Mr. Zuckerberg said. “Because it is global in nature we figured that it might be better to not solely rely on one country’s currency, but because we’re an American company and the American economy is the strongest in the world it makes sense for any reserve to be primarily U.S. dollars and extend America’s financial leadership in that way … We have clearly not locked down how this is going to work yet.”

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