Zuckerberg Defends Facebook Cryptocurrency Project to House Committee

The New York Times Technology 1 month ago

WASHINGTON — Mark Zuckerberg, Facebook’s chief executive, returned to the hot seat on Wednesday to defend a cryptocurrency project that has become the latest target of criticism from lawmakers frustrated with the social media giant.

In a hearing before the House Financial Services Committee, Mr. Zuckerberg presented a rosy view of how the cryptocurrency would provide a safe way for millions of Americans without bank accounts to exchange money affordably.

And in a response to an outcry from financial regulators, he said Facebook would not offer Libra, its cryptocurrency initiative, anywhere in the world “unless all U.S. regulators approve it.”

Lawmakers have been unsparing in their criticism of Libra and Facebook’s leader. On Wednesday morning, they also criticized Facebook on several other issues, including housing and its hands-off stance toward dishonesty from political candidates.

Representative Maxine Waters, the committee chairwoman, set the tone of the meeting early. She grilled Mr. Zuckerberg on the company’s political ads policy, Facebook’s willingness to allow virtually unfettered speech across the platform and the company’s shifting positions on how it wished to treat so-called blockchain advertising and technology across its services.

“The impact of this will be a massive voter suppression effort. Your claim to promote freedom of speech does not ring true,” she said.

Ms. Waters started the hearing with an opening statement that also touched on the company’s continued problems with foreign election interference, privacy violations, its poor record on work force diversity and allegations of housing discrimination from its ads platform.

A torrent of criticism has been directed toward Facebook’s cryptocurrency effort since it was announced in June. But Mr. Zuckerberg, who is personally fascinated by cryptocurrencies, is committed to the project.

Facebook officials over the last week have been on a charm offensive with regulators and lawmakers, leading up to the hearing on Wednesday. And Mr. Zuckerberg has taken on a more assertive role in defending the social network in Washington in recent weeks.

Facebook has one of the biggest influence operations in Washington and has fortified its lobbying in response to the increased government scrutiny this year. Facebook is on track to spend $12.3 million to lobby the federal government in the first nine months of the year, compared to $12.6 million for all of last year, according to public filings.

But the financial industry and tech companies are growing increasingly leery of the cryptocurrency project. Facebook originally brought on 27 partners to join a Libra Association in Switzerland that is supposed to govern the network. But several big-name partners, including PayPal, Mastercard and Visa, have dropped out.

Mr. Zuckerberg described Libra as a democratizing financial system that would benefit mostly poor consumers, as well as the estimated 14 million people in the United States who do not have access to bank accounts and who cannot afford banking fees.

“People pay far too high a cost — and have to wait far too long — to send money home to their families abroad. The current system is failing them,” Mr. Zuckerberg said in the advance version of his testimony. “The financial industry is stagnant and there is no digital financial architecture to support the innovation we need. I believe this problem can be solved, and Libra can help.”

This is a developing story. It will be updated.

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