At 10 a.m. EDT Wednesday, Facebook Chairman and CEO Mark Zuckerberg will testify before the U.S. House Financial Services Committee. Among the topics he will address are Facebook’s proposed cryptocurrency, Libra, and Calibra, the company’s proposed digital wallet by which consumers and businesses could use the Libra currency.
Lawmakers on both sides of the aisle and overseas have expressed alarm over the proposal – with good reason. The currency could devastate the global financial system and jeopardize consumer well-being, Public Citizen told the committee on July 17. Even some of Facebook’s corporate partners, such as PayPal and Mastercard, have abandoned the project.
At the July 17 hearing, Public Citizen President Robert Weissman testified that the currency “threatens to facilitate massive consumer rip-offs, privatize currency, undermine countries’ ability to pursue monetary policy, impose needless risks to global financial stability, enable criminal money laundering and entrench Facebook as an unparalleled global monopolist.”
Earlier that month, Public Citizen led a coalition of 33 groups that sent a letter to Congress and regulators urging them to impose a moratorium on Libra. Later, Public Citizen had a public Twitter exchange with the co-creator of the Libra project.
Weissman is available for comment on Zuckerberg’s testimony about Libra and can tell you that:
- The Libra proposal poses a fundamental threat to the ability of nations to maintain their own monetary policy and address currency crises.
- Libra is overwhelmingly likely to extend and deepen Facebook’s social media dominance into the global payments market and potentially into the market for real goods as well, punishing competitors and ripping off consumers.
- At scale, Libra will become systemically important, but without the controls on financial institutions – such as deposit insurance – designed to protect against systemic risk.
- Libra will make it very difficult to ensure that consumers are afforded appropriate disclosures, civil remedies, defense against unfair and deceptive practices, and more.
- Libra would give Facebook significant power over information flows and our economy, while potentially worsening the already serious problem of algorithmic racial discrimination.
- As the head of a company with a long history of misusing and exploiting user data, Zuckerberg should not be given the benefit of the doubt when he says he will protect Facebook’s users.
In addition, Emily Peterson-Cassin, Public Citizen’s digital rights advocate, is available to discuss Facebook’s data collection and use practices. She can discuss the implications of unlimited data collection and the need for safeguards against algorithmic discrimination and protections for our digital rights.
And Lisa Gilbert, Public Citizen’s vice president of legislative affairs, can discuss Public Citizen’s analysis of the money that Facebook, Amazon, Apple and Google have spent over the past eight years in lobbying and campaign contributions to influence lawmakers.