Head of Facebook's cryptocurrency project vows to work with regulators, lawmakers

Head of Facebook's cryptocurrency project vows to work with regulators, lawmakers
© iStock, The Hill illustration

David Marcus, the head of Facebook's cryptocurrency project Libra, in a blog post on Wednesday vowed to work closely with regulators, lawmakers and banks as the company seeks to unveil its controversial digital currency.

Marcus, who is set to testify before the Senate Banking and House Financial Services committees over the next few weeks, wrote that he hopes to "provide answers and add clarity" amid a storm of sharp criticism and raised eyebrows from lawmakers on Capitol Hill.

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"We believe in and are committed to a collaborative process with regulators, central banks, and lawmakers to ensure that Libra helps with the kinds of issues that the existing financial system has been fighting, notably around money laundering, terrorism financing, and more," Marcus wrote.

His blog post, which addresses some of the top questions Marcus has fielded since Facebook unveiled Libra two weeks ago, comes the day after top Democrats on the House Financial Services Committee called for a temporary pause on the project.

Lawmakers have raised concerns over Facebook, an embattled company with more than 2.3 billion users worldwide, launching its own currency. House Financial Services Committee Chairwoman Maxine WatersMaxine Moore WatersDemocrats could introduce articles of impeachment next week What are not criteria for impeachment? Fed's top regulator takes heat from both parties MORE (D-Calif.) in a statement slammed Facebook's repeated privacy breaches, alleged violation of consumer protection laws and a string of other controversies involving user data.

Sen. Sherrod BrownSherrod Campbell BrownBoth sides have reason to want speedy Trump impeachment trial Lawmakers battle over future of Ex-Im Bank Hillicon Valley: Senate Dems unveil privacy bill | Trump campaign, RNC rip Google political ad policy | Activists form national coalition to take on Amazon | Commerce issues rule to secure communications supply chain MORE (Ohio), the ranking Democrat on the Senate Banking Committee, said, “Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy." 

Facebook is already facing scrutiny on Capitol Hill over its market power and mishandling of user data.

Marcus addressed some of those concerns in the blog post.

He noted that Libra will be operated by a nonprofit called the Libra Association, which will be operated out of Switzerland and include "over a hundred members" by the cryptocurrency's expected launch next year.

"Facebook will not control the network, the currency, or the reserve backing it," Marcus wrote.

Calibra — a Facebook subsidiary — will operate the wallet. According to Marcus, "while Facebook, Inc. owns and controls Calibra, it won’t see financial data from Calibra."

The U.S. government is still grappling with how to handle cryptocurrency, with financial regulators taking a variety of approaches to oversight, and Facebook's entrance into the nascent industry is certain to pose a set of new challenges.

"We’re talking about something new, at scale in a very regulated industry, and if this is not done right, it could definitely present systemic risks no one wants," Marcus wrote.