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U.S. lawmakers say Facebook cannot be trusted to manage cryptocurrency

U.S. lawmakers say Facebook cannot be trusted to manage cryptocurrency.  

A group of U.S. lawmakers said Facebook Inc cannot be trusted to manage cryptocurrency and urged the social media platform to discontinue immediately a small pilot of its cryptocurrency wallet named Novi, which was launched on Tuesday.

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U.S. Democratic senators Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren and Tina Smith voiced their opposition to Facebook's two-year-old effort to launch a cryptocurrency and digital wallet.

"Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape," the senators wrote in a letter to Facebook Chief Executive Mark Zuckerberg.

"Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient," the senators wrote.

The letter by the senators indicates that even Facebook's small pilot of its cryptocurrency wallet will face scrutiny from lawmakers and regulators, who have previously raised antitrust and other concerns.

Also Read: A brief look at Facebook's digital currency venture

A Novi spokesperson said: "We look forward to responding to the committee’s letter."

Facebook unveiled a cryptocurrency project in June 2019, as part of an effort to expand into e-commerce and global payments.

But the project immediately ran into fierce opposition from policymakers globally, who worried it could erode their control over the money system, enable crime and harm users' privacy.

In December, the project was rebranded in a renewed effort to gain regulatory approval, with its scope scaled back further to a single dollar-backed digital coin.

In another development, The U.S. Senate will hold an Oct. 26 hearing with tech firms Snap's Snapchat, TikTok, and Alphabet's YouTube about their platforms' impact on young users, the panel said on Tuesday.

Also Read: Instagram, Facebook, and LinkedIn share over 50% user data with third party firms, study says

"Recent revelations about harm to kids online show that Big Tech is facing its Big Tobacco moment — a moment of reckoning," said Senator Richard Blumenthal, who chairs the Senate Commerce consumer protection subcommittee holding the hearing.

"We need to understand the impact of popular platforms like Snapchat, TikTok, and YouTube on children and what companies can do better to keep them safe."

Senator Marcia Blackburn, the top Republican on the subcommittee, said, "TikTok, Snapchat, and YouTube all play a leading role in exposing children to harmful content."

A Snap spokeswoman said the company looks forward to discussing their "approach to protecting the safety, privacy and wellbeing of our Snapchat community." TikTok confirmed it would take part, while YouTube did not immediately respond to a request for comment.

Earlier this month, the panel held a hearing with Facebook whistleblower Frances Haugen, who turned over thousands of documents she said showed the company had failed to protect young users.

"The company's leadership knows how to make Facebook and Instagram safer, but won't make the necessary changes because they have put their astronomical profits before people. Congressional action is needed," Haugen said.

At the hearing, Blackburn accused Facebook of turning a blind eye to children below age 13 on its services. "It is clear that Facebook prioritizes profit over the well-being of children and all users," she said.

Facebook Chief Executive Mark Zuckerberg rejected the criticism. "The argument that we deliberately push content that makes people angry for profit is deeply illogical," he wrote. Last month, Facebook said it was putting on hold a new version of its Instagram photo sharing app for kids.


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Printable version | Nov 28, 2021 7:49:16 PM | https://www.thehindu.com/sci-tech/technology/us-lawmakers-say-facebook-cannot-be-trusted-to-manage-cryptocurrency/article37083741.ece

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