Facebook is botching its dream of becoming a new powerhouse in finance, failing to win over lawmakers and regulators who say they are far from ready to allow the social media giant’s ambitious cryptocurrency plans to move forward.
With back-to-back Senate and House hearings set to kick off Tuesday morning, key lawmakers and aides from both parties said in interviews that they had not yet had the chance to meet with Facebook or had gotten incomplete, at times conflicting, information from briefings involving the company.
The rollout of the Libra project is the latest evidence that Facebook is still struggling to wield influence in both Washington and in the European Union after being dogged by controversies about its data privacy practices and role in facilitating election interference.
The backlash from Congress — fueled in part by Facebook’s weak lobbying push — will likely feed efforts by regulators in the U.S. and EU to crack down on Libra, raising questions about whether its 2020 launch will proceed as planned.
“We just need more information,” said Rep. Stephen Lynch (D-Mass.), who said on Thursday he had not met with Facebook on Libra even though he chairs a new financial technology task force in the House. “We’re caught off guard.”
The void has been filled with calls by House Financial Services Chairwoman Maxine Waters (D-Calif.) for Facebook to delay its plans, a surprise Twitter attack by President Donald Trump, who said the currency will have “little standing or dependability,” and warnings by Federal Reserve Chairman Jerome Powell that Libra may pose serious risks to the financial system.
Powell told lawmakers last week that despite the public benefits promised by Facebook, including wider access to financial services, Libra posed “many serious concerns” related to privacy, money laundering, consumer protection and financial stability. On Monday, Treasury Secretary Steven Mnuchin said he too had “serious concerns” that Libra could be misused by money launderers and terrorist financiers.