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GOP lawmaker: Innovation should not go to Washington ‘to die’

Amid bipartisan backlash against Libra, Facebook’s new cryptocurrency project, some House Republicans are urging Congress to keep an open mind about emerging technologies.

The top Republican on the House Financial Services committee warned his colleagues not to make Facebook a “political talking point,” as Facebook faced a second day of questions and criticism from lawmakers on Capitol Hill.

“Washington must go beyond the hype and ensure that it’s not the place where innovation goes to die,” said Rep. Patrick McHenry (R-NC) in his opening statement. “Just because we may not fully understand a new technology proposal does not mean we should immediately call for its prohibition. Especially when that proposal is still just that: a proposal.”

In her opening statements, House Financial Services Committee Chairwoman Maxine Waters (D-CA) blasted Facebook for its past scandals, likening the company to Wells Fargo and Equifax.

Waters has called for a moratorium on the cryptocurrency project until regulators and lawmakers have time to examine it.

“If you talk to any member on this committee, they will know nothing about Libra, they will know nothing about Calibra,” said Waters. “We need to be on top of, and understand, something as massive as this project.”

Other Democratic lawmakers asked Marcus to commit to first launch the project on a smaller scale, with a pilot program, but Marcus again reiterated that the project would not launch without proper approval.

Ahead of the hearing, Democratic lawmakers started drafting a proposal to keep tech companies like Facebook out of financial services.

‘Change is here’

On Wednesday, McHenry urged his fellow lawmakers to approach Libra with “thoughtful oversight” and try to understanding it, instead of shutting it down automatically.

“The reality is, whether Facebook is involved or not, change is here. Digital currencies exist, blockchain technology is real, and Facebook’s entry in this new world is just confirmation, albeit at scale,” said McHenry.

Rep. Patrick McHenry (R-NC) and Chairman of the House Financial Service Committee Maxine Waters (D-CA) listen as David Marcus, CEO of Facebook’s Calibra, testifies on "Examining Facebook's Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System" on Capitol Hill in Washington, U.S., July 17, 2019. REUTERS/Joshua Roberts

Still, McHenry noted he has concerns.

“But, let’s face it. Let’s be honest — it’s Facebook. And I’m skeptical,” said McHenry.

McHenry noted he doesn’t know if Libra would really make it easier and cheaper for people to send money to each other, or if it is a “ploy to shoot Facebook’s Twitter mentions through the roof.”

“Republicans stand ready to work with innovators to successfully implement responsible technology here in the U.S. before we lose out to other countries around the world,” he added.

When asked about McHenry’s comments, Waters said some members were likely trying to ease concerns that Libra critics in Congress are trying to thwart innovation.

“Of course we're not,” said Waters. “We all have an appreciation for innovation, but you know, we can't allow Facebook —or anybody else — to do whatever you want to do and not be concerned about oversight, investigation. That’s our responsibility as members of Congress, and that's what we're going gonna do to make sure, number one, that our consumers are protected,” said Waters.

Several Republicans on the committee praised Facebook’s innovation efforts, but also expressed serious concerns about regulation, data privacy and the potential of blocking consumers from using Libra based on social and political views.

“Of course we're not,” said Waters. “We all have an appreciation for innovation, but you know, we can't allow Facebook —or anybody else — to do whatever you want to do and not be concerned about oversight, investigation. That’s our responsibility as members of Congress, and that's what we're going gonna do to make sure, number one, that our consumers are protected.

Throughout the hearing, Democratic lawmakers slammed Facebook for its lack of trustworthiness, doubted its motives and raised concerns about the tech giant’s reach.

“We are discussing a currency controlled by an undemocratically selected coalition of largely massive corporations,” said Rep. Alexandria Ocasio-Cortez (D-NY).

While Facebook argues it is only one of many members of the Libra Association and won’t have special privileges, Waters and other lawmakers remain skeptical.

“The project was Facebook’s idea, Facebook is spearheading it and recruiting partners. Facebook subsidiary, Calibra, will provide consumers with a digital wallet to store Libra tokens,” said Waters.

Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.

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