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 WatersBanks give Congress, New York AG documents related to Russians who may have dealt with Trump: report Maxine Waters: Force us to ban assault weapons 'or kick our a--- out of Congress!' Maxine Waters: Escalating killings in US motivated by Trump's 'race baiting' 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 BrownDayton Democrat launches challenge to longtime GOP rep Dayton mayor: Trump visit after shooting was 'difficult on the community' Consoler in Chief like Biden is the perfect antidote to a Divider in Chief like Trump 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.