Facebook is in a poor position to promote its plans to launch a global cryptocurrency, Mark Zuckerberg has admitted, in candid testimony released before a key congressional hearing on Wednesday.
The Facebook chief executive said in the prepared remarks that his company was keen to hand over leadership of the project to an association of its partners, given the range of political controversies that continue to dog his company.
He added: “I’m sure people wish it was anyone but Facebook putting this idea forward.”
Mr Zuckerberg will testify to Congress about Project Libra on Wednesday for the first time since it was announced. The hearing in front of the House financial services committee, the chief executive's first time on Capitol Hill since he faced fierce questioning from politicians in April 2018 over the Cambridge Analytica scandal, is likely to prove a key test of whether the troubled project is able to win enough support in Washington to allow it to proceed.
Facebook has said it will not go ahead with the scheme until it secures the necessary regulatory approvals in both Europe and the US. Since it was announced, the plans have been criticised by regulators and politicians around the world. Officials have expressed concern that the currency could be used by criminals to launder money, put customers’ privacy at risk and even undermine the global dominance of the dollar.
Digital wallet
Mr Zuckerberg tackled several of those criticisms in his statement, promising that Facebook’s digital wallet would never share customers’ financial information with the rest of the company without their permission or unless obliged by law.
He also said the company would work with the Federal Reserve to make sure the cryptocurrency “cannot interfere with monetary policy”.
He also mounted a robust defence of the concept, saying it would help bring payments services to the billion people across the world who do not have access to bank accounts.
He said: “People pay far too high a cost – and have to wait far too long – to send money home to their families abroad. The current system is failing them. The financial industry is stagnant and there is no digital financial architecture to support the innovation we need.”
Mr Zuckerberg also defended his company against accusations that it does not do enough to stop discriminatory advertising on its platform. Earlier this year, the US housing agency charged the company with allowing advertisers to use its targeting tools to limit minorities and protected groups from viewing real estate adverts.
The company, which is fighting the charges, attempted to pre-empt such criticisms on Tuesday, announcing it would spend $1 billion to “help address the affordable housing crisis” in California.
Mr Zuckerberg added in his statement: “Advertisers who want to post ads on [housing, employment and credit] now have to go through a special ads purchasing process that does not permit targeting by age, gender or zip code.”
This came a day after the Facebook chief executive separately announced measures to tackle disinformation and foreign interference targeting elections on its platform. – Copyright The Financial Times Limited 2019
