The U.S. Senate’s Banking Committee is obviously worried about Facebook’s upcoming blockchain project and how it will manage Facebook’s users’ financial information. Given the scandals related to user data that the social network has faced in the past, it’s no wonder that the government is getting concerned.
Facebook announced a few months ago that it was putting together a team of high-profile company executives and technology experts. The new team’s purpose would be to do some research on blockchain technology and cryptocurrencies. The group aims to figure out how Facebook can use blockchains and/or cryptocurrencies to its advantage.
The company has been known to be exceedingly active in pursuing that project (because it’s been seeking help from several financial institutions in the world, and looking for all kinds of support), but it’s also been very secretive about the project’s details. And that doesn’t help the Senate’s peace of mind.
A letter to Mark Zuckerberg
There is now an open letter authored by the banking committee. It’s addressed to Facebook’s founder and CEO, billionaire Mark Zuckerberg. It was published last Thursday, and it asks him to shed some light on its mysterious blockchain technology project. Customer’s privacy is a primary concern.
Some excerpts from the letter:
“Last year, Facebook asked U.S. banks to share detailed financial information about consumers […] In addition, privacy experts have raised questions about Facebook’s extensive data collection practices and whether any of the data collected by Facebook is being used for purposes that do or should subject Facebook to the Fair Credit Reporting Act.”
Those concerns have prompted the committee to move and ask Mr. Zuckerberg to explain the essentials of “Project Libra.” It wants to know how it would work, what outreach to financial regulators Facebook has done, and what should be the users’ expectations regarding consumer protection and privacy.
The committee is also interested in finding out what financial information has arrived in Facebook’s hands from banks as well as other institutions of finance; what Facebook intends to do (or actually does) with that info, and if it’s shared or sold with third parties (which is sadly in Facebook’s history); if the personal information collected includes credit ratings and other sensitive data; and last but not least, how is Facebook going to ensure to respect the Fair Credit Reporting Act.
Facebook has been hiring aggressively, looking for new employees that can join its blockchain technology team, and some of them are quite well-known in the field. Christian Catalini, a crypto economist and researcher at MIT, is among the new recruits.
Among the many rumors floating in the crypto verse and the business news, is that the firm will try to raise a billion dollars so it can use the money to support a stablecoin native to the social network.
It’s hard to foresee the effect that the Senate’s committee letter could have on Facebook and Mr. Zuckerberg. But it’s a welcome development because Facebook’s track record in protecting its users’ information has been dismal, to say the least.
There’s nothing wrong in a private company protecting its plans or industrial secrets. The Senate, for instance, is never going to ask for KFC to publish its secret recipe or what’s its proposal for a new dish or marketing campaign. But in this case, taking Facebook’s past behavior into account, government interest can only be appreciated.
Disclaimer: Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.