Congressman Patrick McHenry, Ranking Member on the House Financial Services Committee, told his fellow members at the Libra hearing today to “go beyond the headlines” when probing Facebook’s project to create a global payment ecosystem.
The hours-long hearing saw David Marcus, head of Libra, hammered with many tough questions.
While many of the Representatives voiced support for innovation, McHenry and several of his peers, were more open to the possibility of Libra’s perspective.
In a distributed statement, McHenry had this to say:
“Committee Democrats continued their push for a “permission-based society,” where government stifles innovation, rather than working to understand it and thoughtfully regulate. While many questions remain, Committee Republicans made clear that they stand ready to work with innovators to ensure consumer protection while successfully implementing responsible, and ultimately inevitable, technology here in the United States.”
McHenry said there is tension between the notion of a decentralized currency, or something decentralized, and ultimately privacy, as well as AML and KYC concerns.
“These things stand in conflict with one another and are very difficult things to resolve. In [Libra’s] white paper, you say after five years there will be a transition point and you will go from a permission-based to a permission-less system. Post transition, how do you reconcile the need for controls, which allow you to comply with Anti-Money Laundering and Know Your Customer regulations, with that decentralized notion of a fully decentralized digital currency?”
While McHenry had many questions for Facebook, the Congressman’s words were about the strongest support Facebook had during the hearing. Most Representatives criticized Facebook’s past abuse of user data, transgressions that raise more hurdles for Libra.
McHenry has always been a staunch advocate of Fintech innovation and highly supportive of small business. But as things look now, Facebook has an uphill battle that is getting steeper.