Facebook defends Libra digital currency in US Senate grilling
Executive David Marcus aimed to address concerns raised by the Banking, Housing and Urban Affairs Committee.
The chief of Facebook’s new digital currency has said it understands “loud and clear” that people do not want financial details connected to their social media data.
David Marcus was grilled by US senators who expressed concern about Facebook’s planned cryptocurrency Libra, which will be run by a number of firms including Mastercard, Visa and PayPal.
Facebook will incorporate the currency into its digital wallet called Calibra, while other companies will be able to use Libra in their own apps.
Widespread questions have been raised about whether the social network can be trusted in the financial sector after data privacy issues such as the Cambridge Analytica scandal.
The tech giant has repeated that it will not control the project with any special rights or privileges.
Speaking to the Senate Banking, Housing and Urban Affairs Committee, Mr Marcus said Facebook is willing to hold back from launching Libra until it has satisfied the concerns of the US Treasury and other regulators around the world.
“To earn people’s trust, we will have to have the highest standards when it comes to privacy, and the way we’ve built Calibra is that no financial data or account data that is collected in Calibra to offer the service will actually be shared with Facebook,” he told the committee.
The Calibra wallet will not share individual customer data with the Libra Association or with Facebook, except for limited circumstances such as preventing fraud or criminal activity in complying with the law David Marcus
“The way we’ve built this is to separate social and financial data because we’ve heard loud and clear that they don’t want those two types of data streams connected, so this is the way the system is designed.
“Facebook will only have one vote and will not be in a position to control the association, nor will Facebook or the Libra Association position themselves to compete with sovereign currencies or interfere with monetary policy.
“The Calibra wallet will not share individual customer data with the Libra Association or with Facebook, except for limited circumstances such as preventing fraud or criminal activity in complying with the law.”
Senator Sherrod Brown said Facebook “doesn’t deserve our trust” and “should be treated like the profit-seeking corporation that it is”.
Mr Marcus was also asked about the company’s decision to headquarter the Libra Association in Geneva, Switzerland, and asked whether it was a move to avoid responsibility in the US.
“The US should lead and I want to reaffirm that we chose Switzerland not to evade any responsibilities or oversight but rather because it is a well-established international place with headquarters for the World Health Organisation, the World Trade Organisation and even the Bank of International Settlements,” he said.
“Despite the fact that the Libra Association will be headquartered in Switzerland, it will still register with Financial Crimes Enforcement Network and as a result will have oversight from US regulators.”