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Facebook CEO to appear before Congress on currency plan

WASHINGTON (AP) — Facebook CEO Mark Zuckerberg will seem earlier than Congress this month because the tech large is underneath stress from lawmakers and regulators over its large market energy and file of privateness breaches.

Rep. Maxine Waters, the California Democrat who heads the House Financial Services Committee, introduced Wednesday that Zuckerberg will testify at a listening to by the panel on Oct. 23. The focus shall be on Facebook’s plan to create a digital foreign money and its position in housing. The firm agreed in a authorized settlement in March to overtake its ad-targeting programs to forestall discrimination in housing, credit score and employment adverts.

Lawmakers from each events and prime regulators, together with Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, have criticized Facebook’s plan for the brand new foreign money, expressing concern that it may very well be used for illicit exercise reminiscent of cash laundering or drug trafficking. There is also concern that the huge reserve created with cash used to purchase the brand new foreign money, to be known as Libra, might supplant the Fed and destabilize the monetary system, and that buyers may very well be damage by Libra losses.

“Mark looks forward to testifying before the House Financial Services Committee and responding to lawmakers’ questions,” Facebook stated in a press release Wednesday.

In July, Waters and different committee Democrats despatched a letter to Facebook requesting a halt on transferring ahead with the foreign money and with the digital pockets, known as Calibra, which might be used within the new foreign money system. House Democrats even have threatened laws that will block large tech firms from moving into banking.

Waters has known as Libra “a new Swiss-based financial system” that doubtlessly is just too large to fail and will require a taxpayer bailout.

France’s finance minister stated Wednesday that the European Union mustn’t enable Facebook to develop the foreign money undertaking on “European territory” as a result of it threatens the financial sovereignty of member nations. “It should not be the role of a private company to try to get a sovereign currency like a sovereign state,” Finance Minister Bruno Le Maire stated.

Unlike digital currencies reminiscent of bitcoin or Ethereum, Facebook’s plan requires Libra to be backed by actual currencies.

David Marcus, the Facebook govt main the undertaking, advised lawmakers over two days of congressional hearings in July that Facebook wouldn’t launch the foreign money undertaking till it had obtained all the required approvals from regulators and secured safeguards to guard the privateness of customers’ information. He stated Facebook is not going to management Libra as a result of Facebook shall be solely considered one of about 100 firms and nonprofits in an affiliation that may handle the foreign money.

The plan would open low-cost on-line commerce to hundreds of thousands of individuals all over the world who lack entry to financial institution accounts, and would make it cheaper to ship cash throughout borders, Marcus stated. He didn’t conform to a suspension of the plan or a pilot undertaking, as a number of lawmakers urged.

Facebook, a social media large primarily based in Menlo Park, California, with practically 2.5 billion customers across the globe, is underneath heavy scrutiny from lawmakers and regulators following a collection of knowledge privateness scandals, together with lapses in opening the non-public information of hundreds of thousands of customers to President Donald Trump’s 2016 marketing campaign.

The Justice Department, the Federal Trade Commission and the House Judiciary antitrust subcommittee are all conducting investigations of Facebook and the opposite large tech firms amid accusations of abuse of their market energy to crush competitors.

Zuckerberg had three days of personal conferences in Washington final month with Trump and a number of other lawmakers who, just like the president, are critics of the tech business. He additionally met with the chairman of the House Intelligence Committee to debate methods to forestall international actors from disrupting subsequent yr’s elections. In a separate session, Zuckerberg advised the leaders of the House Judiciary Committee that the corporate would cooperate with their antitrust investigation.

Zuckerberg final testified to Congress within the spring, when he was questioned about privateness, election interference and different points.

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