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Facebook’s Libra cryptocurrency attacked at Senate hearing

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Reuters

Facebook’s plan for a cryptocurrency has come under further attack at a US hearing, with politicians calling the company “delusional” and not trusted.

The Senate Banking Committee is quizzing Facebook executive David Marcus over the tech giant’s intention to launch its Libra digital currency.

The company had showed “through scandal after scandal that it doesn’t deserve our trust”, said senator Sherrod Brown.

Facebook was told to clean up its house before launching a new business model.

The company announced last month plans to launch a digital currency, possibly next year, but first needs to get Washington lawmakers on its side.

But since it unveiled the plan, critics have lined up to voice scepticism, including US president Donald Trump.

Ms Brown told the hearing: “We’d be crazy to give them a chance to let them experiment with people’s bank accounts.” She thought it was “delusional” to think individuals would trust the social media company with their “hard-earned” money.

Other senators shared her concerns. “I don’t trust you guys,” said Republican senator Martha McSally. “Instead of cleaning up your house you are launching into a new business model.”

Mr Marcus, who was president of PayPal from 2012 to 2014, tried to assuage concerns in his opening remarks by promising that Facebook will not begin offering Libra until regulatory issues are addressed.

“We know we need to take the time to get this right,” said Mr Marcus, who is also due to testify before the House Financial Services Committee on Wednesday.

On Monday, US Treasury Secretary Steven Mnuchin said he was “uncomfortable” with Libra, while last week the head of the US Federal Reserve, Jerome Powell, also voiced concerns.

The senators at Tuesday’s hearing raised issues such as how Facebook planned to prevent money laundering through the new payment system and how consumers’ data and funds will be protected.

“I know we have to earn people’s trust for a very long period of time,” Mr Marcus said.

The social media company has pledged that the Libra Association – the supposedly independent body tasked with managing the currency – will only share customer data with Facebook and external third parties if it has consent, or in “limited cases”, where it is necessary.

Facebook’s Libra cryptocurrency attacked at Senate hearing

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