On Wednesday, Facebook cryptocurrency chief David Marcus faced Congress for a second round of questioning, this time from the House Financial Services committee. As in Tuesday’s Senate hearing, Marcus faced deep concerns over Facebook’s previous privacy issues, but there was also new skepticism over the nature of the Libra project itself.
“I don’t think you should launch Libra at all,” Rep. Carolyn Maloney (D-NY) told Marcus in one exchange, “because the creation of a new currency is a core government function and should be left to democratically accountable institutions, that are accountable to the American people. But at the very least, you should agree to do this small pilot program first, fully overseen by the Federal Reserve and the SEC.”
Marcus declined to commit to the pilot program, instead emphasizing Libra’s broader commitment to working with international regulators. “We will continue to engage with regulators and the working group at the G7 that is looking after the issues that you raise,” he responded, “and making sure that however we launch this, we do it responsibly.”
Still, Maloney’s concern is part of a broader shift among lawmakers, many of whom see Libra as an inherent overreach in Facebook’s power, which will be a problem no matter how carefully it’s executed.
That view has inspired a number of bills from Democrats that would seek to outlaw Libra before it can launch. Rep. Maxine Waters (D-CA), who chairs the House Finance Committee, has previously called for Facebook to place development of the currency on hold. Earlier this week, her office circulated a draft bill that would block the project entirely, legally barring large tech platforms from providing financial services. In the Senate, Sen. Brian Schatz (D-HI) has circulated a separate draft bill that would outlaw reserve-backed digital currencies, of which Libra is the most prominent example.
Still, not every lawmaker was so hostile to Facebook’s project. During the hearing, Marcus did commit to not launch Libra until it had received the relevant regulatory approvals. “We do not want to stifle innovation,” said Rep. Nydia Velázquez (D-NY), “but we do have a healthy dose of skepticism.