It’s fairly rare that a group of elected officials can get through a technology-related hearing without embarrassing themselves, but members of the Senate Banking Committee managed to acquit themselves well Tuesday in a surprisingly aggressive grilling of David Marcus, the former PayPal executive currently heading up Facebook’s private cryptocurrency project, Libra. It’s also somewhat rare that a Senate hearing evinces a strong bipartisan consensus, and yet today’s absolutely did: Both Republicans and Democrats don’t trust Facebook, don’t like its products, and don’t want this cryptocurrency to happen.
It made for some fairly compelling watching: There were some good punch lines from both Republicans and Democrats (Louisiana Republican John Kennedy asking if it was Facebook’s fault that good reporting had been replaced by “flagrant displays of bullshit”), and some pointed questions from both Republicans and Democrats (New Jersey Democrat Bob Menendez and Arizona Democrat Kyrsten Sinema trying, with limited success, to pin Marcus down with questions about how Facebook would handle U.S. sanctions on foreign regimes). And then there was Tom Cotton, who asked if Libra would give Silicon Valley the means to stop someone from subscribing to “Breitbart instead of the New York Times.”
This was, as is often the case with the junior senator from Arkansas, a stupid question, but as is often the case with stupid questions, it cut quickly to the heart of the matter. What’s worrisome to senators about Libra — and why today’s hearing was such a bipartisan display of mistrust and skepticism — isn’t merely that Facebook itself is untrustworthy. It’s that Libra is an expression of power. The idea that Facebook would stop Tom Cotton from subscribing to Breitbart is obviously ridiculous. But at the same time it’s not quite clear what would stop Facebook from doing that, if it so chose.
Senatorial dislike of Facebook’s cryptocurrency arises because Libra represents, to a degree of clarity no other Facebook project quite does, a threat to U.S. sovereignty. Menendez and Sinema’s questions about sanctions reflect their concern; as Kennedy put it, “We can agree Facebook is not really a company anymore, it’s a country.” No sane Senate is going to let a breakaway country, with or without actual geographical territory to control, establish a new currency under its nose.
Facebook and Marcus, for better or for worse, understand this objection. Which is why Marcus’s prepared testimony was eager to cast Facebook’s efforts with Libra as a patriotic effort: “I believe that if America does not lead innovation in the digital currency and payments area, others will,” he told senators today. “If we fail to act, we could soon see a digital currency controlled by others whose values are dramatically different.” He’s talking, of course, about China, whose central bank leads the world in cryptocurrency patents, and whose leaders seem eager to enter the digital-currency world. Someone, Facebook has been heavily implying, will control digital currency in the 21st century — that is, someone will threaten the United States’s global financial hegemony. The question it wants the senators to ask is whether they’d rather it be Facebook or China. They may not trust Facebook, but at least it’s nominally American.