As anticipated, today’s HFSC hearing saw Facebook CEO Mark Zuckerberg taking strong fire not only on Libra but also on broader Facebook practices. Chairwoman Waters (D-CA) led Democrats arguing that Facebook cannot be trusted and should halt its Libra plans. Although she said that Congress should examine big tech’s expansion into finance, she did not specifically push legislation barring large tech-platform companies from engaging finance (see FSM Report FINTECH26) or other draft legislation released ahead of the hearing. While Reps. Wagner (R-MO) and Gonzalez (R-OH) emphasized Libra’s risk, Ranking Member McHenry (R-NC) led the majority of Republicans defending Libra as a potentially necessary innovation in the face of Chinese competition. Mr. Zuckerberg emphasized this narrative, saying that Libra would project U.S. influence and values abroad. While he promised that Libra would receive approval from all relevant U.S. regulators, he resisted calls from Reps. Waters, Velázquez (D-NY), and Rose (R-TN) to halt the project until Congress enacts a new framework. The session also brought out growing Congressional interest in central-bank digital currency (CBDC), with GOP Members divided as to whether this is a promising approach to enhancing innovation.
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