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Hearings on Facebook's Libra could dim cryptocurrencies' sheen

Dean DeChiaro, CQ-Roll Call on

Published in Political News

WASHINGTON -- The financial technology industry is anticipating a windfall of attention and possible scrutiny following upcoming House and Senate hearings on Libra, the new cryptocurrency announced by Facebook last month.

Advocates for the growth of blockchain technology and digital currencies say Facebook's entry into fintech is an exciting development for an industry that still exists in relative obscurity because of public misconceptions about the technology and lack of clear regulations governing their use.

Since Facebook's announcement, an increasing number of lawmakers are seeking information on cryptocurrency, said Kristin Smith, director of external affairs at the Blockchain Association.

"We have everyone's attention," she said.

Still, a worry persists that Facebook's bad reputation in Washington and declining favorability among the general public means lawmakers will use next week's hearings, before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday, as an opportunity to paint Libra in a negative light.

"Congress thinks Facebook has lost the trust of some of the public," Smith said. "It's probably pretty good politics to beat up on them right now."

 

In an effort to keep the hearings civil, the Blockchain Association has offered a cryptocurrency briefing to every member of both committees, Smith said. But it seems unlikely lawmakers will pass up a chance to grill Facebook executives in a public setting.

Sen. Sherrod Brown of Ohio, the ranking Democrat on the Banking Committee, has already expressed concerns about how Libra, which Facebook says will be anonymous and managed by a Swiss nonprofit called the Libra Association, will handle certain privacy issues.

And at least one other senator on the committee has made up his mind that the project fits into what he considers the larger machinations of Mark Zuckerberg, Facebook's chief executive

"He wants to control the world's money supply," said Louisiana Republican Sen. John Kennedy. "What could possibly go wrong?"

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