Page 24 - aruba-today-20190620

A24 TECHNOLOGY
Thursday 20 June 2019
Facebook's currency Libra faces financial, privacy pushback

By RACHEL LERMAN encrypted ledger known
AP Technology Writer as the blockchain. Libra
SAN FRANCISCO (AP) — is designed so transac-
Facebook is getting a taste tion amounts are visible,
of the regulatory pushback but transaction partici-
it will face as it creates a pants can be anonymous
new digital currency with — at least until they move
corporate partners. money into real-world ac-
Just hours after the social counts.
media giant unveiled early Facebook said people
plans for the Libra crypto- can keep their individual
currency, French Finance transactions from appear-
Minister Bruno Le Maire ing on the blockchain by
insisted that only govern- using Calibra's wallet app,
ments can issue sovereign though in that case, Cali-
currencies. He said Face- bra itself would have peo-
book must ensure that Libra ple's data.
won't hurt consumers or be Calibra said it won't use fi-
used for illegal activities. nancial data to target ads
"We will demand guaran- on Facebook. It also said it
tees that such transactions won't share financial data
cannot be diverted, for ex- with Facebook, though
ample for financing terror- there are exceptions that
ism," he said on Europe-1 In this April 4, 2013, file photo, Facebook CEO Mark Zuckerberg walks at the company's head- haven't been fully spelled
radio. quarters in Menlo Park, Calif. out, including situations
Facebook unveiled its Associated Press where data sharing would
much-rumored currency "keep people safe."
Tuesday and said it will same model of light regu- transactions as well as con- PRIVACY PUSHBACK? ___
launch publicly early next lation, said Karen Shaw Pe- trol over fees. Facebook has been ANTITRUST RED FLAGS?
year with such partners as trou, managing partner of "Facebook is already too dogged with questions Congress has launched
Uber, Visa, Mastercard and Federal Financial Analytics big and too powerful," said about users' personal data, an inquiry into whether Big
PayPal. in Washington. Sen. Sherrod Brown of Ohio. especially since the Cam- Tech giants such as Face-
Libra could open online She expects Libra will fall Brown and Waters both bridge Analytica scandal book and Google have
purchasing to millions of under U.S. regulations ad- called on financial regula- hit last year. gotten too big. Regulatory
people who do not have opted in the wake of the tors to examine the new That appears to be part of bodies including the Fed-
access to bank accounts 2008 financial crisis. Which currency project closely. the reason Facebook cre- eral Trade Commission and
and could reduce the cost agency will oversee the In a statement, Facebook ated a nonprofit oversight Justice Department are
of sending money across venture will depend on said, "We look forward to association to govern Li- said to be considering in-
borders. It's easy to see what the currency system responding to lawmakers' bra. It also created a sub- vestigations.
how attractive an alterna- does, she said. questions as this process sidiary, Calibra, to work on Adding another major busi-
tive like Libra could be to France's Le Maire said he moves forward." the technology, separately ness will make Facebook
people in countries beset asked central bank chiefs One hurdle Facebook and from its main social media bigger — if Libra takes off
with hyperinflation such as from the G-7 countries to its partners will face is the business. as intended — but it may
Venezuela. produce a report by mid- potential for criminals to "We've heard loud and not raise major antitrust red
But Facebook already July laying out "guarantees use it for money laundering clear that you don't want flags, said New York Univer-
faces scrutiny over its poor that we must set ... to as- and fraud, given the pseu- social and financial data sity law professor Eleanor
record on privacy and its sure us that there are no do-anonymous nature of commingled," Calibra Fox.
dominance in social me- risks of illicit financing or for Libra and other digital cur- head David Marcus wrote "It is a grass-roots entry into
dia, messaging and related the consumer." rencies. on Twitter, addressing a new field and can actu-
businesses. In the U.S., the head of the Facebook said it will com- Facebook users. "We un- ally reflect an increase in
Libra poses new questions House Financial Services ply with all existing financial derstand we will have to innovation," she said.
for the social network: Giv- Committee wants Face- regulations, though it has earn your trust." Still, she said, people could
en that cryptocurrency is book to suspend plans for not offered many details. In some ways, privacy is the be alarmed because of
lightly regulated now, if at a new currency until Con- The company said its wallet enemy in the battle against Facebook's use of data in
all, how will financial regu- gress and regulators are app for using Libra will walk money laundering and oth- the past. And Justice De-
lators oversee Facebook's able to study it more close- people through a verifica- er crimes, Weaver said. You partment officials have
plan? And just how much ly. tion process to ensure they want to know who is mak- hinted they may take a
more personal data will this In asking Facebook to put are who they say they are. ing transactions to keep broader view of harm to
give the social media gi- the Libra currency plans on Still, Facebook is sure to them secure and legal, he competition to go well be-
ant, anyway? hold, Rep. Maxine Waters, face an onslaught of liabil- said. yond whether a company's
___ a California Democrat, said ity concerns when it comes Facebook is "going to get dominance leads to higher
A 'RUDE AWAKENING' OVER Facebook "is continuing its to anti-money laundering access to a lot of financial prices.
REGULATION? unchecked expansion and and identity verification, data," Forrester analyst Au- Sarah Miller, deputy direc-
The financial industry is extending its reach into the said Nicholas Weaver, a relie L'Hostis said. "What are tor of Open Markets In-
more heavily regulated lives of its users." senior researcher at the In- they going to do with that stitute, which advocates
than internet companies — The senior Democrat on the ternational Computer Sci- information and what are against monopolies, said it
especially in the U.S., where Senate Banking Commit- ence Institute at the Univer- they going to put in place was "insanity" to trust Face-
tech companies have of- tee said Facebook's new sity of California, Berkeley. to safeguard that informa- book to launch a global
ten been given free rein. digital currency will give "I am shocked they have tion?" cryptocurrency when it is
Companies creating Libra the tech giant unfair com- decided to go ahead," he Cryptocurrencies such as already facing regulatory
are in for a "rude awak- petitive advantages in col- said. Libra store all transactions scrutiny around the world
ening" if they expect the lecting data on financial ___ on a widely distributed, over data privacy.q