META Meta Platforms Inc

By Dave Michaels and Paul Vigna 

WASHINGTON -- Top Senate lawmakers questioned Facebook Inc.'s plans for its own cryptocurrency, with the banking committee's leading Democrat saying the social-media giant isn't trustworthy enough to operate its own digital money.

Sen. Sherrod Brown (D., Ohio) on Tuesday said Facebook's market power and concerns that it has failed to oversee abuses of its platform mean it can't be given authority over a digital currency that could boost its role in online commerce.

"Like a toddler who has gotten his hands on a book of matches, Facebook has burned down the house over and over, and called every arson a learning experience," Mr. Brown said at a hearing of the Senate Banking Committee where Facebook executive David Marcus is testifying.

Committee Chairman Mike Crapo (R., Idaho) said the proposal heightens the need to pass legislation that would give consumers more control over the information they share online and raises questions about how much data the tech giants ingest about users' behavior and preferences.

However, Mr. Crapo also said Facebook's cryptocurrency, known as Libra, could provide social benefits, showing Facebook could have allies on Capitol Hill as it strives to launch Libra by 2020.

"If done right, Facebook's efforts to leverage existing and evolving technology and make innovative improvements to traditional and nontraditional payments systems could deliver material benefits, such as expanding access to the financial system for the underbanked, and providing cheaper and faster payments," Mr. Crapo said.

Facebook won't move forward with Libra until it has "fully addressed regulatory concerns and received appropriate approvals," Mr. Marcus said in a written statement prepared for the panel. But opposition from within the Trump administration, some corners of Congress and international officials could mean the tech giant can't kick-start the project as soon as it hoped.

Treasury Secretary Steven Mnuchin said Monday that cryptocurrencies, including potentially Libra, are a "national security issue."

President Trump tweeted last week that Libra would have "little standing or dependability" and suggested that Facebook's project should be subject to banking regulations. Mr. Mnuchin said Facebook has a high bar to show it can operate the system while guarding against risks that are prevalent with cryptocurrencies, including money laundering.

Facebook has said it hopes to make Libra available next year on its Messenger and WhatsApp services and as a stand-alone app.

The company has said it doesn't expect the project to make money "at the outset." But it hopes that even in the near term, the currency will make it easier for smaller companies to do business with Facebook's users. That additional activity is also likely to boost advertising revenue, Facebook says.

Write to Dave Michaels at dave.michaels@wsj.com and Paul Vigna at paul.vigna@wsj.com

(END) Dow Jones Newswires

July 16, 2019 11:15 ET (15:15 GMT)

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