Libra’s Future in Question as Mark Zuckerberg Set to Testify Before Congress
Facebook CEO Mark Zuckerberg is set to testify before the Financial Services Committee of the United States Congress later this month.
Things do not seem to be going as planned for Facebook’s Libra as Mark Zuckerberg is set to testify before the US Congress later in the month. This was revealed by the Chairwoman of the United States House Committee on Financial Services Maxine Waters (D) in a press statement yesterday. The Chairwoman indicated that a letter had been sent to the Social media giant in July “requesting an immediate moratorium on the implementation of Facebook’s proposed cryptocurrency, Libra, and digital wallet, Calibra”.
The hearing will feature Mark Zuckerberg as the sole witness at the hearing which has been entitled: “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors.” The press statement also made mention of the “Keep Big Tech Out of Finance Act” which is draft legislation that seeks to keep technology giants out of the banking and financial services sector.
The statement noted:
“The bill also prohibits large platform utilities from establishing, maintaining, or operating a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function as defined by the Federal Reserve”.
In what seems to have been a masterstroke for the US Congress, finally, the technology wizard from Menlo Park California will have to answer questions by himself this time. At the last hearing concerning Libra, Zuckerberg sent a representative David Marcus; a move which was considered by many pundits to be a snub to the lower house of the American parliament leading the Democratic caucus.
All hasn’t been well with the Libra project in recent times. Payment services giant Paypal recently pulled out of the Libra Association amidst concerns by many about Facebook’s ability to maintain fidelity in large projects. This indirectly results from the Cambridge Analytical scandal, the privacy breaches that made Facebook pay $5 Billion and other breaches that have set many on edge.
Additionally, other payment service providers and card services firms including Visa and Mastercard have been considering their position on backing the Libra project. Already, pressure has been mounted by the members of the United States Senate urging Visa, Mastercard, and Stripe to pull out of Libra. This is an indication that the US government is doing all it can to protect big banking from the technology giants who have all the tools in their arsenal to take over banking and finance.
The initial attitude of Calibra’s CEO David Markus in September criticizing the SWIFT network and other payment systems currently in use hasn’t helped one bit. This singular action has already given everyone within financial and technology circles bad vibes about the Libra project. As for the big question of Libra’s survival, it is too early to tell but it is going to be an interesting couple of months for the Libra project.