Is Facebook really going to launch a currency?

Facebook says Libra would let users around the world — especially those without traditional bank accounts — send money as easily as sending a text message.

By Shannon Bond

And while the project was originally Facebook’s idea, it is meant to come to life with the help of 27 founding partners, including financial services companies.

But Libra hit hurdles as soon as it was announced. Regulators around the world have taken a dim view of the project, sounding fears that it could pose a threat to financial stability and be used to fund terrorism and other illegal activities.

In recent weeks, several of the initial partners backed away — including the credit card companies Visa and MasterCard and the digital payment firms PayPal and Stripe. People close to some of the companies that have dropped out told NPR they were concerned about angering regulators, given that they already operate in highly regulated industries.

Asked at the hearing why the partners had dropped out, Zuckerberg gave a blunt response: “Because it’s a risky project and there’s been a lot of scrutiny.”

He acknowledged the criticism of Libra and Facebook’s role. “I’m not the ideal messenger right now. We’ve faced a lot of issues over the past few years, and I’m sure people wish it were anyone but Facebook helping to propose this.”

Is Facebook too powerful?

Congress is not the only branch of government asking tough questions about Facebook. The Federal Trade Commission, the Department of Justice and a group of 47 state attorneys general are all investigating Facebook for potential antitrust violations.

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“You have opened up a serious discussion about whether Facebook should be broken up,” Waters told Zuckerberg on Wednesday.

The state prosecutors are “concerned that Facebook may have put consumer data at risk, reduced the quality of consumers’ choices, and increased the price of advertising,” New York Attorney General Letitia James said Tuesday.

Some critics are calling for the company to be broken up, or for its acquisitions of Instagram and WhatsApp to be unwound. Warren has made the breakup of Facebook — along with Google and Amazon — a key part of her campaign platform.

Some tech veterans agree. Marc Benioff, the CEO of software company Salesforce, told CNN that Facebook is “addictive” and has too much control of users’ data — and therefore should be broken up. “They’re having an undue influence as the largest social media platform on the planet,” he said.

And even a Facebook co-founder has turned on the company. Chris Hughes, who was one of Zuckerberg’s roommates at Harvard, launched a $10 million anti-monopoly fund to support policy, academic research and organizing to take on corporate power in tech and other industries.

Zuckerberg bristles at the idea of breaking up his company. In leaked audio from staff meetings this summer, obtained by the website The Verge, the CEO said Facebook would “fight” any effort to do so and expected to win any legal challenge.

At Georgetown last week, Zuckerberg acknowledged criticism of big tech — but deflected the argument.

“I understand the concerns that people have about how tech platforms have centralized power. But I actually believe the much bigger story is how much these platforms have decentralized power by putting it directly into people’s hands,” he said.

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Editor’s note: Facebook is among NPR’s financial supporters.

By Shannon Bond

Source Link www.npr.org

 

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