What to Expect When Congress Grills Facebook on Cryptocurrency

Congressional hearings on Facebook's Libra project are likely to focus more on the company's privacy failings than on unresolved policy questions for cryptocurrency.

Lawmakers will probably also grill Facebook blockchain lead David Marcus on the company's choice of Switzerland as the home for the Libra Association.

Though Facebook intends to launch Libra next year, regulatory and congressional scrutiny may throw that timeline into jeopardy.

For starters, if the Securities and Exchange Commission decides that Libra resembles an exchange-traded fund, then Facebook's ability to launch the cryptocurrency will be dependent on the regulator's approval.

If lawmakers come away from the hearings satisfied with Marcus's statements, then Facebook will have passed a major hurdle on its road to launching Libra.

Libra, as outlined last month, is designed to be an open-source cryptocurrency that individuals - regardless of whether they're Facebook users - can send each other for payments.

The Senate Banking Committee has been looking into Libra since at least May, when chairman Michael Crapo and ranking member Sherrod Brown wrote an open letter to Facebook asking several questions about the project.

Kristin Smith, head of the Blockchain Association, a lobbying group, told CoinDesk that "Given the recent turmoil surrounding Facebook and the general shift in perspective on Big Tech in D.C., it's natural that Facebook itself would be getting the majority of the focus from lawmakers, rather than the specifics of the Libra project."

House Financial Services Chair Maxine Waters and ranking member Patrick McHenry, in their own statements questioning the project, also indicated that their concerns lie more with Facebook than with the cryptocurrency itself.

Brown tweeted last month that "We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight."