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On News You May Have Missed: Facebook Wants To Get It's Own Currency And US Senators Don't Wanna Hear It
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Facebook announced in June that it planned to launch a cryptocurrency known as Libra next year, a proposal that has caused alarm because of the enormous market power the company wields and its recent history of data breaches.
The US Federal Trade Commission last week approved a fine of roughly US$5 billion ($7.1 billion) against Facebook for mishandling users’ personal information.
Speaking at a special hearing of the Senate Banking Committee on Tuesday, local time, Democratic Senator Sherrod Brown said: "Facebook is dangerous.
"Like a toddler who has gotten his hands on a book of matches, Facebook has burned down the house over and over, and called every arson a learning experience."
Referencing Facebook's early motto of "move fast and break things", Brown said the company could not be trusted to handle people's money.
"They moved fast and broke our political discourse. They moved fast and broke journalism. They moved fast and helped incite a genocide. They moved fast and they’re helping to undermine our democracy," said Brown, a popular senator from Ohio who surprised many observers by declining to run for president this year.
"We would be crazy to give them a chance to experiment with people’s bank accounts, to use powerful tools they don’t understand like monetary policy to jeopardise hardworking Americans’ ability to provide for their family."
Brown said Facebook had displayed a "breathtaking amount of arrogance" in believing it could provide a currency for the entire world after its recent scandals
Republican Senator Martha McSally said: "I don't trust you guys.
"Instead of cleaning up your house you are launching into a new business model."
US President Donald Trump tweeted last week that the Libra, "will have little standing or dependability".
Trump said he was "not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air".
US Federal Reserve chairman Jerome Powell warned last week that "Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability".
Facebook was represented at the hearings by David Marcus, the head of the company's new digital currency division Calibra.
He said the new currency would make transferring money across the globe quicker and cheaper than traditional bank transfers.
"The status quo is not working for many - it is too expensive for people around the world to use and transfer their money," he said.
"We believe Libra can offer a more efficient, low-cost, and secure alternative."
He assured the Senate committee that Facebook would not begin offering Libra until it has received government approval and regulatory concerns are addressed.
"We know we need to take the time to get this right," Marcus said.
"I know we have to earn people's trust for a very long period of time."
Facebook has been under increasing pressure over its huge market power, with leading Democratic presidential contenders Elizabeth Warren and Bernie Sanders vowing to break the company up to promote competition.
Senators on the committee raised a range of concerns on Tuesday, including about how the company would prevent money laundering, fraud and the violation of international sanctions.
Facebook has said it wants to make Libra available through its Messenger feature and texting platform WhatsApp, as well as through a standalone app.
Calibra has pledged that it will not share customer data with Facebook or external third parties unless it has consent, or in "limited cases," where it is necessary.
Marcus said Facebook would not monetise users’ data related to Libra, and that no financial or account data from the Libra network would be shared with Facebook.
"We’ve heard loud and clear from people, they don’t want those two types of data streams connected," Marcus said.
Source: The Sydney Morning Herald
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