With the conclusion of the Senate Committee of Banking, Housing and Urban Affairs yesterday, there were undoubtedly some conclusions to take away from the representatives and David Marcus of Libra's statements. While the latter expressed an open and supportive hand both to international regulatory agencies, but to those in developing nations.
The former meanwhile expressed the high-minded rhetoric expressed by Marcus as ‘bullshit' and the overarching prospect of a digital cryptocurrency made and launched by Facebook as being akin to a ‘small child with a book of matches'.
While we can certainly agree that a reasonable degree of foul play with regards to users data is as good an excuse as any to treat Facebook with high degrees of suspicion. But with the second day of the committee, is there going to be some kind of change of heart? Not likely.
Here are some of the big takeaways from the Senate Committee and Mr Marcus as the grilling continues.
Wells Fargo and Equifax were among some of the company comparisons made during the opening statements. Serving as evidence of the magnitude of harm that Facebook had incurred upon its user-base.
The representative further highlighting the critical failures on Facebook's part, not only to secure data but also to operate with user interests in mind. Citing the 50 million user accounts sold off to Cambridge Analytica last year.
“Libra is made all the more troubling because [Facebook] it has already harmed vast numbers of people on a scale similar to Well Fargo.”
“Facebook remains under a 2011 consent order by the Federal Trade Commission for deceiving consumers and failing to keep consumer data private safe.”
Big Techs Big Self-Interest
While some may disagree; companies inhabiting the world of ‘Big Tech' are self-interested. As businesses, they are intrinsically looking out for their own interests, to the betterment or detriment of people and governments. We've seen this with the kind of de-monetising, de-listing and removal of various unsavoury individuals that tech companies have been involved in.
It stands to reason that the Senate committee would be concerned about any company looking at extending its reach from social media, into the highly sensitive world of finance.
But, as was mentioned by Steve Mnuchin in a press conference early this week – there is a particular interest that the government has in assuring the US Dollars national and international hegemony.
“Change Is Here”
Representative McHenry took to referring to Facebook's foray into the world of cryptocurrency with Libra as creating a ‘Crypto Mafia' (quoting from a favorite headline of his) in the interests of its founding members.
Much as McHenry himself does concede, however, there is only delaying innovation like blockchain and crypto, only delaying it.
“Whether Facebook is involved or not, change is here, digital currencies are here, and blockchain technology is real… It's an unstoppable force, and we should not be attempting to stop this innovation.”
The ranking member from North Carolina does present to us the irony of the fight over Cryptocurrencies and blockchain technology. Having prided itself on generations of entrepreneurship through the years, to have the current hard-line approach towards crypto and blockchain on a federal level smacks of a little historical irony.
But it would seem that the committee is attempting to navigate the technology and re-invent itself with the times. As McHenry identifies how the US is not equipped to support these new kinds of innovation and calls for measured insight into the technology, and education on the concerns that come with it.
The added positive is that the collective literacy of the committee does appear to be of this century.
Progress and Libra – Be Patient and Thorough
“We are fully committed to working with regulators both here and across the world. Facebook will not offer the Libra digital currency until we have fully addressed regulators concerns and received appropriate approvals.”
But even with this more open-handed approach towards regulation. The first issue is whether or not Libra's structure will prove effective enough to serve the billions of people it seeks to help and represent. Secondly, while representatives like McHenry have expressed a desire, from Republicans at least, to support initiatives like Libra in these early stages.