Facebook’s Zuckerberg gets grilling from Congress on planned cryptocurrency

Facebook founder and CEO Mark Zuckerberg again found himself in front of a Congressional committee, tasked this time with scrutinising his plans to launch a cryptocurrency.

In a gruelling encounter with US lawmakers on Wednesday, Zuckerberg was forced to instead defend past controversies involving the social media giant.

The anger among lawmakers surrounds Facebook’s conduct in the run-up to the 2016 presidential election.

In the years after the Trump campaign’s upset victory, whistleblowers alleged that data analytics firm Cambridge Analytica had been able to scrape data on Facebook users, and put that information to use in order to specifically target potential voters in key swing states.

The platform is also believed to have been used by foreign governments and political interest groups to spread fake news about candidates they did not like.

Others have, however, accused Facebook of turning a blind eye to the issues associated with its social network in the pursuit of profit with one former Cambridge Analytica employee calling the site ‘the biggest threat to democracy’.

Facebook has presented these incidents and others as oversights and exploitation by insidious actors, while admitting it needs to do more to protect user data but on the issue of fake news, the company has been dragging its feet.

Politicians are seemingly allowed to publish false information about rivals without any pushback from the company.

In an exchange with Democrat Alexandria Ocasio-Cortez, Zuckerberg said that the company would take down content aimed at suppressing voter turnout and encouraging violence but stopped short of any pledge to take down outright lies spread by politicians.

Ocasio-Cortez put one hypothetical to Zuckerberg in which she described an advert suggesting a Republican rival supported her plans for a ‘Green New Deal’, a policy most in the party are opposed to, and asked him whether it would be allowed to stay up. The Facebook chief struggled to answer; “I think, probably,” he responded.

Libra

Lost in the back-and-forth was information about what Facebook’s cryptocurrency was and the issues associated with it specifically.

Named Libra, Facebook’s currency that allow users to make transactions online, bypassing traditional banks - a move that has the potential to reduce transfer costs when sending money between accounts.

Unlike other cryptocurrencies like Bitcoin, Libra will be run centrally instead of blockchain and will also be pegged to a basket of fiat paper currencies, such as the US dollar and British pound, ensuring that it will be protected from value fluctuations associated with traditional cryptocurrencies.

Some of the concerns surrounding the proposed currency is its possible exploitation by criminal groups to make transactions and Facebook’s track record in its previous ventures, specifically its handling of user data.

While US lawmakers are only just starting to formally scrutinise the cryptocurrency venture, in Europe lawmakers have already warned of the risk of a Facebook controlled ‘shadow bank’. French officials have dismissed the idea that the currency would ever be allowed to operate in Europe on the grounds that it would pose a threat to ‘monetary policy’.

Some of Facebook’s initial partners in the scheme, such as Visa, Mastercard, Paypal, and eBay, have also pulled out prior to its launch.

Zuckerberg told lawmakers that he would withdraw Facebook’s support for the project if it did not get regulatory approval in the US.