Crypto markets were in disarray, falling nearly 12%, as anticipation built for Mark Zuckerberg to appear before the House Financial Services Committee and defend his Libra Project. Financial markets, at least the ones than handle cryptocurrencies, did not like the uncertainty, but what was certain was that Congressmen were loaded for bear, so to speak. Facebook’s CEO may have been there for Libra, but there were several other points of pain that would be addressed before the day was done.
In keeping with tradition, Zuckerberg was allowed to read a personal statement, before the “fun” would begin. It was also presented ahead of time to Congressmen and the press, as a way to highlight key arguments to be made and to give hearing attendees a chance to prepare their own “Q&A” in advance. Zuckerberg’s basic theme, as relayed by Coin Telegraph, was that:
Facebook will not be part of launching the Libra payments system anywhere in the world until US regulators approve.
And we thought the Calibra Association was in charge, with Facebook securely behind a firewall of Mark’s making?
In his intro, Mark also used China as a veiled threat to be wary of:
While we debate these issues, the rest of the world isn’t waiting. China is moving quickly to launch similar ideas in the coming months. Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership as well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed.
From that lofty definition of the Libra competitive playing field and its vision, the hearing quickly went downhill. It was quite a while, however, before the discussion ever came back around to Libra. There were far too many criticisms that had been festering for months about what Facebook had done and not done, and Congressmen were prepared to give Zuckerberg his forty lashes, regardless of how they may have felt about cryptocurrencies and anything else having to do with the digital asset world.
The Washington Post had this brief summary of the day’s main event:
Congressional lawmakers delivered a broad lashing of Facebook chief executive Mark Zuckerberg on Wednesday, sniping at his company’s plans to launch a digital currency, its pockmarked track record on privacy and diversity, and its struggles to prevent the spread of misinformation online. The wide-ranging criticisms came largely from Democrats… Facebook’s efforts have catalyzed a rare alignment of opposition from the party’s members of Congress and some Trump administration officials.
The largest of the criticisms seem to center about Facebook’s inability to police political ads, thereby allowing for a “lower standard for truthfulness and decency”, permitting politicians to spread disinformation and lies, and raising divisions of hate among local constituencies. Democratic Rep. Rashida Tlaib noted: “It is hate speech, it’s hate, and it’s leading to violence and death threats in my office.” Zuckerberg defends his firm’s action, since he fears an “erosion of truth”, but he asserted:
Elections have changed significantly since 2016, and Facebook has changed, too.
To his credit, Zuckerberg did provide many more details in his opening statement as to how the Libra project would proceed, that Facebook would have little control over the process, that security was a big issue, and that the project would most likely be delayed in order to get regulatory approval every step of the way.
I believe this is something that needs to get built, but I get that I’m not the ideal messenger right now. We’ve faced a lot of issues over the past few years, and I’m sure people wish it were anyone but Facebook that were helping to propose this. But there’s a reason we care about this. And that’s because Facebook is about putting power in people’s hands.
The “power” today, however, was in the hands of the committee. Comments ran the gamut of “Have you learned that you should not lie?” asked Rep. Nydia Velazquez (D., N.Y.), to these words from Rep. Patrick McHenry (R., N.C.):
There’s a lot of anger out there, and now, it’s being directed at the architects of the system. And maybe it’s not about Libra. It’s not just about some housing ads. And maybe it’s not even really about Facebook at all. Fair or not fair, you’re here today to answer for the digital age.