What the Senate Banking Committee wants to know about Facebook’s Libra Cryptocurrency

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What the U.S. Senate Banking Committee wants to know about Facebook's Libra Cryptocurrency

The U.S. Senate Banking Committee has scheduled a hearing in July to address the concerns it has about Facebook’s new cryptocurrency, Libra.

This latest development comes less than 24 hours after House Financial Services Committee Chairwoman Maxine Waters (D-Calif) called for Facebook to halt development on the highly anticipated project.

The hearing, titled Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations, will be held on July 16, 2019, at 10:00 a.m. and will be broadcast live to the public.

Since the release of Libra’s whitepaper on Tuesday, the ambitious crypto project has encountered fierce opposition both at home and abroad.

Several members of Congress have already contacted the Banking Committee to voice concerns about Libra and the potential risks it could pose.

Speaking on the matter, a spokesperson for Facebook said that the company “[looks] forward to responding to lawmakers’ questions as this process moves forward.”

What does the Committee want to know about Libra?

What does the Committee want to know about Libra?

While no information has yet to be released about specific witnesses being called to testify at the hearing, a letter sent to Facebook CEO Mark Zuckerberg last month by Banking Committee Chairman Mike Crapo (R-Idaho) and Ranking Member Sherrod Brown (D-Ohio) may provide some clues as to what concerns will be addressed.

The letter, dated May 9th, asks several questions of Zuckerberg:

  1. How would this new cryptocurrency-based payment system work, and what outreach has there been to financial regulators to ensure it meets all legal and regulatory requirements?
  2. What privacy and consumer protections would users have under the new payment system?
  3. What consumer financial information does Facebook have that it has received from a financial company?
  4. To the extent Facebook has received consumer financial information from a financial company, what does Facebook do with such information and how does Facebook safeguard the information?
  5. Does Facebook share or sell any consumer information (or information derived from consumer information) with any unaffiliated third parties?
  6. Does Facebook have any information bearing on an individual’s (or group of individuals’) creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living that is used (either by Facebook or an unaffiliated third party) to establish eligibility for, or marketing of a product or service related to, (1) credit, (2) insurance, (3) employment, or (4) housing?
  7. How does Facebook ensure that information bearing on an individual’s (or group of individuals’) creditworthiness, credit standing, credit capacity, character, general reputation, and/or personal characteristics is not used in violation of the Fair Credit Reporting Act?

The Committee’s website notes that neither Zuckerberg nor anyone else from Facebook has yet to respond to the letter.

However, a company representative told Coindesk that “we received the letter and are addressing the senators’ questions.”