Mark Zuckerberg details digital currency plans before US lawmakers

Facebook CEO Mark Zuckerberg endured hours of prickly questioning from lawmakers Wednesday as he defended company’s new globally ambitious project to create a digital currency while also dealing with widening scrutiny from U.S. regulators. Representatives also grilled Zuckerberg on Facebook’s track record on civil rights, hate speech, privacy and misinformation — t surprising given litany of scandals Facebook has been dealing with over past two years. House Financial Services Committee’s immediate focus was Facebook’s plans for currency, to be called Libra. Zuckerberg took pains to reassure lawmakers that his company won’t move forward with Libra without explicit approval from all U.S. financial regulators. 

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Still, many members of panel appeared unconvinced. Rep. Maxine Waters, California Democrat who chairs panel, said Libra project and digital wallet that would be used with it, Calibra, “raise many concerns relating to privacy, trading risks, discrimination ... national security, monetary policy and stability of global financial system.” Furrmore, Waters told Zuckerberg, “You have opened up a discussion about wher Facebook should be broken up.” 

social media giant has sparked public and official anger at every turn, from its alleged anticompetitive behaviour to its shift into messaging services that allow encrypted conversations, to its refusal to take down phoney political ads or doctored videos. breakup specter — worst-case scenario for Facebook and or tech behemoths — has been raised by prominent politicians, tably Sen. Elizabeth Warren, a leading Democratic presidential candidate. 

Justice Department, Federal Trade Commission, House Judiciary antitrust subcommittee and attorneys general in several states are all conducting investigations of Facebook and or tech giants amid accusations that y abuse ir market power to crush competition. Zuckerberg was on defensive at hearing, his first testimony to Congress since April 2018, parrying criticism but also ackwledging lapses. He conceded at one point that Libra project is “risky,” ackwledging several high-profile companies such as Visa, MasterCard and PayPal had signed on as partners in currency’s governing association but have recently bailed. 

Under continued criticism of Facebook’s handling of hate speech and potential incitements to violence on its site, he said, “We’re t perfect. We make a lot of mistakes.” Trust was a central me of hearing. Given Facebook’s history, “why should Congress, regulators and public trust you to create what amounts to world’s largest bank, what really amounts to a shadow sovereign government?” asked Rep. Madeleine Dean, a Democrat from Pennsylvania. Responded Zuckerberg: “Well, congresswoman, we are t creating a bank. We are helping an organization create a payment system.” Zuckerberg held up China as a strong reason for encouraging invation as embodied in Libra project. 

“While we debate se issues, rest of world isn’t waiting," he said. “China is moving quickly to launch similar ideas in coming months.” Facebook also has cited competition from China as a compelling argument against breaking up company. 

Zuckerberg’s China statements found a ready echo from some Republicans on committee, such as Rep. Patrick McHenry of rth Carolina, who stepped up to defend Libra project and urge lawmakers t to put “invation on trial.” But Democrats, in a rare tilt, allied mselves with President Donald Trump and his Treasury secretary, Steven Mnuchin, who have publicly criticized Libra plan. Mnuchin and or regulators, including Federal Reserve Chairman Jerome Powell, have warned that digital currency could be used for illicit activity such as money laundering or drug trafficking. 

Zuckerberg touted his optimistic vision of Libra and what it could mean for people around world who don’t have access to bank accounts. A bulk of hearing also focused on Facebook’s record on diversity and civil rights. Rep. Joyce Beatty, a Democrat from Ohio and vice-chair of Congressional Black Caucus, lambasted Zuckerberg over his company’s track record on both. 

Demanding yes or answers, Beatty asked Zuckerberg, for instance, how many of Facebook’s stable of big law firms are a mirity or woman-owned or how many women or mirity partners work on company’s cases. She told Zuckerberg Facebook works with civil rights groups only because of “ number of lawsuits you’ve had.” A subdued-looking Zuckerberg didn’t get in much in way of answers. Beatty finished by calling Facebook’s conduct ” appalling and disgusting” and told Zuckerberg that “you have ruined lives of many people, discriminated against m.” 

( content has been edited from Associated Press wire feed, except  headline).

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