technology

Zuckerberg to testify at hearing on cryptocurrency plan

Mark Zuckerberg

Facebook CEO Mark Zuckerberg will testify this month before the House Financial Services Committee as the social networking giant tries to ease concerns from lawmakers and regulators about its embattled cryptocurrency project Libra, the committee confirmed Wednesday.

The hearing, which is also expected to focus on Facebook's impact on financial services and housing, is scheduled for Oct. 23. POLITICO first reported Zuckerberg's scheduled appearance.

The committee, chaired by Rep. Maxine Waters (D-Calif.), had been pressing for Zuckerberg to testify, though its initial talks with Facebook centered on Chief Operating Officer Sheryl Sandberg as a possible witness. David Marcus, who oversees the company's division tied to Libra, testified before the House and Senate earlier this year.

Zuckerberg's decision to appear before the House Financial Services Committee comes after the executive told Facebook employees during two company meetings in July that he has no intention of attending every government hearing where his presence is requested, according to leaked audio of the meetings.

"I'm not going to go to every single hearing around the world," he said. "A lot of different people want to do that. ... It just doesn't really make sense for me to go to hearings in every single country that wants to have me show up."

But Zuckerberg is accepting this invitation at a critical time for the future of Libra, which isn’t set to be launched until next year but already faces a worldwide assault from policymakers alarmed by potential dangers it may pose to consumers and the financial system.

A number of Capitol Hill lawmakers have questioned whether Facebook could be a trusted player in the global currency market given its past data privacy lapses. Waters has said Facebook should put Libra on hold until policymakers' concerns are addressed. President Donald Trump, Treasury Secretary Steve Mnuchin and Federal Reserve Chair Jerome Powell have also been critical of the effort.

"Mark looks forward to testifying before the House Financial Services Committee and responding to lawmakers’ questions," a Facebook spokesperson said.

The session will be Zuckerberg's second Hill appearance in recent months. He made a rare visit to Capitol Hill and the White House in September amid rising bipartisan scrutiny of his company's business practices, including its handling of private data and its overall market dominance. Before that, Zuckerberg had last testified in 2018 about Facebook's role in the Cambridge Analytica scandal, which saw the private information of millions of the platform's users leaked to a political consulting firm tied to then-candidate Trump's campaign.

Facebook and the Libra Association, a collection of companies and organizations set to govern the cryptocurrency, have touted Libra as a next-generation payment network that would make transactions simple for people around the world, including the 1.7 billion who don't have bank accounts.

Facebook has pledged in recent weeks to hold off on launching Libra until it can allay U.S. regulators’ concerns — a tall order that officials doubt Libra can meet any time soon, raising questions about whether it will get off the ground.

Nevertheless, the escalating pressure may be too much for some of Libra's early backers. On Friday, the online payments company PayPal left the Libra Association without publicly providing a reason for its decision.

PayPal's exit amounted to blood in the water for politicians looking to derail Libra. Zuckerberg’s testimony runs the risk of further exposing Libra to potentially fatal political pressure.

In letters Tuesday, Democratic Sens. Brian Schatz of Hawaii and Sherrod Brown of Ohio discouraged payment companies Visa, Mastercard and Stripe from continuing as members of the Libra Association.

“If you take this on, you can expect a high level of scrutiny from regulators not only on Libra-related payment activities, but on all payment activities,” the senators said.