Facebook's planned cryptocurrency received a chilly response from regulators, nonprofits and politicians all expressing concerns about the social network's ambitious project. Even U.S. President Donald Trump bashed Libra, which was unveiled just a month ago, saying it will have "little standing or dependability."
The environment will likely get frostier when the Senate banking committee convenes a hearing on Tuesday morning to discuss Facebook's plans. Despite its dry title -- the hearing is called "Examining Facebook's Proposed Digital Currency and Data Privacy Considerations" -- the meeting will give legislators the opportunity to sound off about their concerns. They seem to have plenty.
In fact, senators have been looking into Libra since before its was officially announced on 18 June 2019. In early May, Sens. Mike Crapo, R-Idaho, and Sherrod Brown, D-Ohio, the chairman and ranking member, wrote to Facebook CEO Mark Zuckerberg seeking information about Libra after months of leaks about the project. David Marcus, the Facebook executive running the Libra project, answered the senators' questions two months later.
The House of Representatives has had a similarly skeptical view of Libra. Maxine Waters, the California Democrat who chairs the House Financial Services Committee, has called on Facebook to pause the project until legislators can vet it.
However, the U.S. legislators need to know some things.
This isn't actually Facebook's cryptocurrency. It's the project of the Libra Association, which Facebook co-founded. The association, which will serve as a monetary authority for the cryptocurrency, says Libra's purpose is to "empower billions of people," citing 1.7 billion adults without bank accounts who could use the currency.
But Facebook has its own interest in digital cash that predates Libra. The social network ran a virtual currency, called Credits, for about four years as a way to make payments on games played within Facebook. In May, Mark Zuckerberg said that sending money online should be as simple as sending photos. Libra is designed to make it easier and cheaper for people to transfer money online, which might attract new users to the social network.
Facebook may also have bigger plans for Libra, though it hasn't shared them yet. A new subsidiary, called Calibra, will run a wallet that will be necessary in the initial rollout. "Facebook created Calibra, a regulated subsidiary, to ensure separation between social and financial data and to build and operate services on its behalf on top of the Libra network," according to a white paper describing the Libra project. Analysts at RBC Capital Markets say those services will likely include games and commerce.
The environment will likely get frostier when the Senate banking committee convenes a hearing on Tuesday morning to discuss Facebook's plans. Despite its dry title -- the hearing is called "Examining Facebook's Proposed Digital Currency and Data Privacy Considerations" -- the meeting will give legislators the opportunity to sound off about their concerns. They seem to have plenty.
In fact, senators have been looking into Libra since before its was officially announced on 18 June 2019. In early May, Sens. Mike Crapo, R-Idaho, and Sherrod Brown, D-Ohio, the chairman and ranking member, wrote to Facebook CEO Mark Zuckerberg seeking information about Libra after months of leaks about the project. David Marcus, the Facebook executive running the Libra project, answered the senators' questions two months later.
The House of Representatives has had a similarly skeptical view of Libra. Maxine Waters, the California Democrat who chairs the House Financial Services Committee, has called on Facebook to pause the project until legislators can vet it.
However, the U.S. legislators need to know some things.
This isn't actually Facebook's cryptocurrency. It's the project of the Libra Association, which Facebook co-founded. The association, which will serve as a monetary authority for the cryptocurrency, says Libra's purpose is to "empower billions of people," citing 1.7 billion adults without bank accounts who could use the currency.
But Facebook has its own interest in digital cash that predates Libra. The social network ran a virtual currency, called Credits, for about four years as a way to make payments on games played within Facebook. In May, Mark Zuckerberg said that sending money online should be as simple as sending photos. Libra is designed to make it easier and cheaper for people to transfer money online, which might attract new users to the social network.
Facebook may also have bigger plans for Libra, though it hasn't shared them yet. A new subsidiary, called Calibra, will run a wallet that will be necessary in the initial rollout. "Facebook created Calibra, a regulated subsidiary, to ensure separation between social and financial data and to build and operate services on its behalf on top of the Libra network," according to a white paper describing the Libra project. Analysts at RBC Capital Markets say those services will likely include games and commerce.
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