Facebook’s plans to launch a new cryptocurrency called Libra in 2020 has faced pushback from lawmakers and nonprofits concerned about the social network’s seemingly endless list of scandals tied to privacy and security.
On Wednesday, Facebook’s blockchain boss, David Marcus, tried to soothe those worries, reiterating in a post that the company won’t have direct control of the cryptocurrency. The social network expects more than 100 organizations will join the nonprofit that will oversee Libra.
“You won’t have to trust Facebook to get the benefit of Libra,” he said. “Facebook won’t have any special responsibility over the Libra Network.”
Facebook is also creating a digital wallet, called Calibra, so that users on its Messenger and WhatsApp messaging services can exchange money for Libra. People will also be able to choose other digital wallets, if they wish.
Marcus’ remarks come as US lawmakers and nonprofits press the company to answer questions about the project, including why they should trust Facebook’s vow that it will not use data from its digital wallet. On Tuesday, the Economic Policy Institute, US PIRG and other nonprofits, as well as five Democratic lawmakers, sent the company two separate letters asking Facebook to pause its plans to develop a new cryptocurrency.
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Lawmakers aren’t the only one wary about the project. Some of the 27 partners working with Facebook have their own concerns because of the social network’s worrying track record when it comes to privacy and its issues with regulators worldwide, according to The New York Times. The partner companies, which include Uber, Visa, Mastercard, eBay and Spotify, signed nonbinding agreements that give them the ability to back out if they don’t like where the project is headed, the paper reported.
Facebook executives will have a chance to answer questions about Libra later this month. On July 16, the Senate banking committee is scheduled to hold a hearing on Facebook’s cryptocurrency. The House Financial Services Committee is expected to hold a hearing on Libra on July 17. Marcus said he looks forward to testifying in both hearings and engaging with lawmakers, regulators and banks.
“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,” he said.