Facebook official responds to Maxine Waters on cryptocurrency project

Facebook official responds to Maxine Waters on cryptocurrency project
© Aaron Schwartz

David Marcus, the head of Facebook's new cryptocurrency project, Libra, assured Rep. Maxine WatersMaxine Moore WatersDivides over China, fossil fuels threaten House deal to reboot Ex-Im Bank Hillicon Valley: Lawmakers unleash on Zuckerberg | House passes third election interference bill | Online extremism legislation advances in House | Google claims quantum computing breakthrough On The Money: Lawmakers hammer Zuckerberg over Facebook controversies | GOP chair expects another funding stopgap | Senate rejects Dem measure on SALT deduction cap workarounds MORE (D-Calif.) that the company is "taking the time to do this right" after a group of Democratic lawmakers, including Waters, called for Facebook to halt its plans.

In a letter to Waters and other top members of the House Financial Services Committee, Marcus defended Libra's mission and vowed to answer policymakers' "important questions," according to a copy of the letter obtained by The Hill on Tuesday ahead of planned hearings on the issue.

"I want to give you my personal assurance that we are committed to taking the time to do this right," Marcus wrote.

The letter, dated July 3, is addressed to the group of Democratic lawmakers who last week called for a moratorium on Facebook's Libra project. The House Financial Services Committee members, including Democratic Reps. Carolyn Maloney (N.Y.), Wm. Lacy Clay (Mo.), Al Green (Texas) and Stephen Lynch (Mass.) as well as Waters, panned Facebook's history of privacy scandals and the potential for its new cryptocurrency to attract hackers.

Their letter called for Facebook to "cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action," saying a failure to do so "risks a new Swiss-based financial system that is too big to fail."

In response to the group of critics, Marcus wrote, "We understand that big ideas take time, that policymakers and others are raising important questions, and that we can't do this alone."

"We want, and need, governments, central banks, regulators, non-profits, and other stakeholders at the table and value all of the feedback we have received," he wrote.

Capitol Hill has responded to Facebook's new cryptocurrency project with widespread skepticism and sharp pushback as lawmakers have said they are wary of the embattled company with billions of users launching its own currency.

A coalition of consumer groups quickly backed the calls for a moratorium, claiming the U.S. regulatory system is not prepared to take on such an expansive cryptocurrency project.

Waters, the chairwoman of the House Financial Services Committee, has offered some of the most scathing feedback.

“With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users,” Waters said in the statement, hitting Facebook over its alleged violation of consumer protection laws and ongoing data privacy controversies.

In the letter, Marcus noted that the Libra Association — the Switzerland-based nonprofit that will operate the cryptocurrency — released its plans early in order to field questions and concerns from policymakers. Facebook says it will only be one member of the Libra Association, meaning the company will not retain singular control over the digital currency.

Libra is backed by dozens of powerful businesses, including Mastercard and Uber, and is slated to launch next year. Libra has branded itself as an effort to aid the “unbanked,” the estimated 1.7 billion people who do not have access to traditional banking.

"Libra is about a big idea," Marcus wrote. "The goal of the Libra Association is to reduce transaction costs and expand access to the financial system using blockchain technology."

Marcus is set to testify before Waters's committee next week, as well as the Senate Banking Committee, and the letter could preview some of what he plans to say.