U.S. Sen. Sherrod Brown Rips Facebook’s Cryptocurrency Plan

Likening the social media company to a “toddler who has gotten his hands on a book of matches,” the lawmaker criticized the company’s plan to launch its own digital currency during a Senate hearing Tuesday.

by Sabrina Eaton, Advance Ohio Media / July 17, 2019
Shutterstock/jakkapant turasen

(TNS) — Ohio’s Sen. Sherrod Brown on Tuesday likened Facebook to a “toddler who has gotten his hands on a book of matches” at a U.S. Senate hearing on the social network’s plans to launch a new digital currency called Libra.

“Facebook has burned down the house over and over, and called every arson a learning experience,” said Brown, who serves as the top Democrat on the Senate Committee on Banking, Housing and Urban Affairs. “Facebook has two competing missions – make the world more open and connected, and make a lot of money. And as Facebook attempts to serve both of those missions, they wreak havoc on the rest of us.”

In expressing doubt about the social media network’s currency plan, Brown and his committee colleagues highlighted Facebook’s repeated scandals in failing to protect users’ privacy, its use by Russians attempting to meddle in U.S. elections, its use to spread propaganda in Myanmar that led to genocide, and claims the platform discriminates against conservative political views it disagrees with, among other issues.

“It is pretty hard to trust you with a worldwide currency that you are setting up in Switzerland” Brown told David Marcus, who heads the Calibra Facebook subsidiary that is spearheading the development of the new currency.

Marcus repeatedly told the committee that if American companies like Facebook don’t lead innovation in the digital currency and payments area, others will. He said Facebook has democratized “free, unlimited communications for billions of people” and wants to “help do the same for digital currency and financial services, but with one key difference: We will relinquish control over the network and currency we have helped create.”

He said that Libra would be used to send money to family members in other countries or to make purchases. He described it as a digital currency built on a secure and stable open-source blockchain, backed by a reserve of real assets, and governed by an independent association. He assured antsy senators that requiring Libra users to secure their accounts with government identification would prevent the currency from being used for illicit purposes, like money laundering and financing terrorism.

“We want to create more access to better, cheaper, and open financial services—no matter who you are, where you live, what you do, or how much you have,” Marcus told the committee. “We recognize that the road to reaching that goal will be long, and it will not be achieved in isolation. That is why we have begun publicizing the vision for Libra and why we have been discussing, and will continue to discuss, how best to achieve that goal with businesses, nonprofit and multilateral organizations, and academic institutions from around the world, as well as with policymakers, central banks, and regulators.”

The committee’s chairman, Idaho Republican Mike Crapo, expressed concern that a Facebook-affiliated online currency would have difficulties securing users data.

“Congress needs to give individuals real control over their data,” said Crapo.

Several of the Republicans on the committee expressed support for the effort, with Pennsylvania’s Pat Toomey arguing it’s premature “to say that we should strangle baby in crib,” and North Carolina’s Thom Tillis arguing that a well-funded consortium led by Facebook would be likely to produce a “gold standard that will drive down the cost of transactions and provide better value for people who have least ability to pay transaction fees.”

But Democrats on the committee agreed with Brown.

“Trust is something you earn and Facebook has not earned it," said New Jersey’s Bob Menendez.

Brown pointed out that Facebook’s motto has been “Move Fast and Break Things,” and argued that they’ve lived up to that motto by helping to incite genocide, harming democracy and undermining journalism by profiting from the distribution of content Facebook doesn’t pay to produce. He called Facebook’s plans “a recipe for more corporate power over markets and consumers, and fewer and fewer protections for ordinary people.

"It takes a breathtaking amount of arrogance to look at that track record and think, you know what we really ought to do next?" Brown continued. Let’s run our own bank and our own for-profit version of the Federal Reserve for the world. I understand that given the financial crisis and given the massive inequality and unfairness to workers in our economy, it’s tempting to think anyone could do a better job than the Wall Street megabanks. But the last thing we need is to concentrate even more power in huge corporations."

©2019 Advance Ohio Media, Cleveland. Distributed by Tribune Content Agency, LLC.

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