Zuckerberg Admits Facebook’s Flailing Cryptocurrency Project Is ‘Risky’ as Partners Jump Ship

Facebook CEO Mark Zuckerberg testified Wednesday before the House Financial Services Committee in a hearing about the company’s imperiled cryptocurrency project Libra.

In the hearing, Zuckerberg made efforts to distance Facebook from the project, even as he shepherded it through lawmakers’ many concerns about his own company destabilizing the global financial system.

When pressed by Rep. Ann Wagner (R-MO) about news that “scores of stable partners” have fled the project, Zuckerberg conceded that the waters were choppy. As of this month, PayPal, Visa, MasterCard, Stripe, and EBay have all dropped their involvement in Facebook’s cryptocurrency ambitions.

“It’s a risky project and there’s been a lot of scrutiny,” Zuckerberg admitted. 

“I believe that it’s important to try new things, as long as you do so responsibly,” he said, defending Facebook’s decision to press on in spite of setbacks.

With cameos on the Hill from Facebook’s chief executive relatively rare, the hearing skipped from topic to topic, rarely with a coherent through line. In one low point, Rep. Bill Posey (R-FL) condemned Facebook for its bias against anti-vaccine content, demanding the Facebook founder answer the question “Are you 100 percent confident that vaccines pose no injury to anyone on this planet?”

After Zuckerberg defended the scientific consensus around the issue, Posey attacked the platform’s policy as silencing beliefs that its chief executive doesn’t agree with.

“If you look at the statistics, I think you’re making a bad mistake,” Posey said.

Zuckerberg endured tough questioning about Facebook’s myriad issues throughout the hearing, but remained composed. Rep. Alexandria Ocasio-Cortez (D-NY) pressed him on Facebook’s decision to fact check ads purchased by politicians only when they contain lies aimed at suppressing participation in elections or the census.

Rep. Madeleine Dean (D-PA) hinted at possible attempts by Facebook to curry favor with the administration through renting blocks of rooms at the Trump International Hotel in Washington, D.C., but after the hearing, she reportedly said she had no knowledge of whether the company went to such lengths. Rep. Katie Porter (D-CA) asked Zuckerberg if he would commit to doing the work of Facebook content moderators, a grueling job done in harsh conditions, to which he offered a lukewarm denial. 

In his opening statements, Zuckerberg acknowledged that Facebook has faced a series of setbacks in recent years and that those scandals may hinder its efforts to launch its proposed cryptocurrency Libra, a “stablecoin” with a value tied to and backed by traditional currency.

“I’m sure people wish it was anyone but Facebook putting this idea forward,” he said. To assuage the concerns, he repeated the assertion that Facebook and the cryptocurrency’s governing group, the Libra Association, would not launch Libra until regulators were satisfied. 

He pitched Libra as “promoting financial inclusion through a safe, low-cost, and efficient way of sending and receiving payments around the world,” a technological solution to limited access to bank accounts, one that is “not an attempt to create a sovereign currency,” that is, would not compete with the U.S. dollar. 

He argued that if the United States didn’t lead the way in creating a digital currency, others—particularly China—would: “If America doesn’t innovate, our financial leadership is not guaranteed… There’s no guarantee that services which support democracy and fundamental rights around expression will win out.”

Lawmakers on both sides of the aisle have shown a strong distaste for Libra, including the committee’s chairwoman Maxine Waters. Democratic lawmakers denounced Facebook’s “breathtaking amount of arrogance” at a hearing in July, and Treasury Secretary Steven Mnuchin has expressed concern that terrorists will use Libra to fund illegal and dangerous activities.

Congressmen have expressed frustration with Zuckerberg’s refusal to answer questions with a “yes” or “no” in this hearing and prior ones. Rep. Patrick McHenry (R-NC), the ranking Republican on the committee, summarized the feeling at the end of the six-hour hearing: "I'm not sure we learned anything new here,” he said. “We don't have a deeper understanding of how Libra would work.”