US senators Tuesday questioned whether Facebook can be trusted with a massive financial responsibility at the first public hearing on its plan for a global digital currency called Libra.
The lawmakers added to criticism of the plan unveiled by Facebook last month with two dozen partners on the digital coin, touted as a way to lower costs and facilitate cross-border money transfers.
David Marcus, Facebook's executive heading the digital coin effort, defended the plan during more than two hours at a Senate Banking Committee hearing on Libra, pledging to comply with all regulations to thwart money laundering and criminal activity.
Yet several senators warned of the risks of the plan and questioned whether Facebook can be trusted after a wave of missteps on privacy and data protection.
"Facebook might not intend to be dangerous but surely they don't respect the power of the technologies they are playing with," said Senator Sherrod Brown, an Ohio Democrat.
"Over and over, Facebook has said just trust us, and every time Americans trust you, they seem to get burned."
"Imagine a daughter who wants to send money home to her mom in another country. Of the USD 200 she sends, USD 14 on average will be lost because of fees. It can also take several days or even a week for the mother to receive the money, a delay that can prove disastrous in an emergency."
"You violated privacy in the past as a company... yet you are launching a new product and you're claiming that the privacy is going to be protected. So how are users to know that that's also not going to change and they're not going to be violated?"
"Whether they're banks or non-banks, they're under the same regulatory environment," Mnuchin told reporters at the White House, adding that Facebook "will have to have a very high standard before they have access to the financial system."
Disclaimer: No Business Standard Journalist was involved in creation of this content