Facebook’s Secretive Crypto Project Has the U.S. Senate Worried

Facebook’s Secretive Crypto Project Has the U.S. Senate Worried
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Facebook’s rumored cryptocurrency project is in the news once again, and it appears that its development is now a talking point in Capitol Hill.

On May 9, the Committee on Banking, Housing, and Urban Affairs at the United States Senate wrote an open letter to Mark Zuckerberg, Chairman and Chief Executive Officer of Facebook, asking for some specific details about the company’s crypto project, which has been rumored for months now. The letter, which was signed by Committee Chairman Mike Crapo (R-ID) and Ranking Member Sherrod Brown (D-OH), was sent in a bid by the committee to ensure customer privacy is adhered to when the cryptocurrency launches.

Particularly, the committee asked Zuckerberg to outline certain details about the project. In part, it read:

“The Wall Street Journal recently reported that Facebook is recruiting dozens of financial firms and online merchants to help launch a cryptocurrency-based payments system using its social network […] In addition, privacy experts have raised questions about Facebook’s extensive data collection practices […] Accordingly, please respond to the following questions.”

The committee’s questions included how the digital asset will work, Facebook’s level of correspondence with regulators concerning the asset, the privacy protection measures that have already been set up, the type of customer information that has been gotten from financial companies, and whether the company shared any customer information with “unaffiliated third-parties”

As stated earlier, Facebook’s rumored digital asset has sent a lot of excitement across the crypto industry. Many are giddy at the prospect of a company of Facebook’s stature making a foray into crypto, especially as it could spur other tech giants to do the same. However, not much is known about this project. While most reports, such as this one by the New York Times, on it have dubbed it “FB Coin,” the Baking Committee’s letter referred to it as “Project Libra.”

The fact that no one even knows what the asset will be called or if it would be listed on exchanges like Coinbase or Binance, is only a testament to how much the company has worked to keep its development under wraps.

Nevertheless, it’s also worth noting that the Banking Committee has good cause to be “concerned” about the project. Tech companies, regardless of the industry they’re affiliated with, have a duty to ensure that their customers- as well as their privacy and funds, as the case may be- are protected from data breaches, hacks, and other forms of compromise.

Sadly, however, Facebook hasn’t been known to inspire public confidence in this regard for the past few years. Multiple reports of poor information handling have rocked the company for the better part of 18 months, and it is only right for the government to ensure that whatever it will be launching from now on adheres to strict data security standards. 

About Jimmy Aki

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Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.

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