U.S. lawmakers from both sides of the aisle were set to grill Facebook Inc. on its cryptocurrency plans on Tuesday, as the project continues to draw intense scrutiny from financial regulators and politicians across the globe.
Facebook is fighting a rearguard action to get Washington onside after it shocked regulators and lawmakers with an announcement on June 18 that it was hoping to launch a new digital coin called Libra in 2020.
Since then, it has faced criticism from policymakers and financial watchdogs at home and abroad who fear widespread adoption of the digital currency by the social media giant’s 2.38 billion users could upend the financial system.
“Facebook has demonstrated through scandal after scandal that it doesn’t deserve our trust,” Democratic Senator Sherrod Brown, the ranking member of the Senate banking committee, said in his opening remarks. “We’d be crazy to give them a chance to let them experiment with people’s bank accounts.”
Critics have expressed anger the company would have gone so far in its plans for such a potentially groundbreaking project without extensive input from policymakers, especially when it is already in the spotlight over privacy issues.
The banking committee is questioning David Marcus, the company’s top executive overseeing the project, on issues ranging from how Libra could affect global monetary policy to how customer data will be handled.
Marcus, president of PayPal from 2012 to 2014, tried to assuage concerns in his opening remarks by promising that Facebook will not begin offering Libra until regulatory issues are addressed.
“We know we need to take the time to get this right,” said Marcus, who is also due to testify before the House financial services committee on Wednesday.
Marcus is likely to get a frosty reception from other Democratic lawmakers who already believe the company is too large and careless with consumer data.
He is also likely to face skepticism from Republicans after U.S. President Donald Trump and Treasury Secretary Steven Mnuchin voiced concerns.
“They’re going to have to convince us of very high standards before they have access to the U.S. financial system,” Mnuchin said on Monday.
Facebook allocated a small fraction of its vast workforce to work on the project, Kevin Weil, who runs product for the Libra initiative, told Reuters on June 18.
One former employee told Reuters the company tried to keep the project under wraps even internally — staff who were not involved knew little about it, not even that it was operating under the name Libra.
Rumours had surfaced as early as last year that Facebook was working on a digital currency, but news that the project was in its advanced stages started to emerge only in recent months.
In the weeks leading up to the announcement, the company began reaching out formally to key regulators including the Federal Reserve, the Treasury and the Commodity Futures Trading Commission. But two people with knowledge of the discussions said the conversations remained vague, with key details of the project discussed only on a theoretical level.
Some lawmakers specializing in financial services policy have been frustrated by the lack of clarity from Facebook before and since June 18, three congressional sources said.
For example, the top Republican and Democrat on the Senate banking committee sent Facebook a letter on May 9 seeking information, including how the company would protect consumers’ financial information. But Facebook did not write back until July 8, the committee said.
After receiving the response, the lead Democrat on the panel, Senator Sherrod Brown, said in a statement he still needed “real answers.”
One Democratic aide described the company’s contacts with lawmakers as “inept and entitled.”
In its defence, Facebook has said that it announced the project in its early stages to get feedback from stakeholders.
City reacts to Aurora Cannabis announcement
“I’ve been talking a lot about Aurora around Medicine Hat since April of 2018 and celebrating the fact that they came here, chose us over Quebec or anywhere else in Canada they could have gone, and what a great thing it is for the community and the jobs and just the optimism,” he said. “I’ve sensed an increase of optimism in the community.
“When I heard this news yesterday, it was a setback, and I’m disappointed. They’re a private company, this has nothing to do with the City of Medicine Hat. They’re free to make any decision they need to make.”
In its report, Aurora cited lower than expected revenue from cannabis as a reason for the decision.
The decision about the construction will save Aurora a total of $190 million dollars.
Lisa Kowalchuk, executive director of the Medicine Hat and District Chamber of Commerce, says she believes Aurora remains committed to Medicine Hat.
“Aurora has very much been committed to our community and very invested in our community,” she said. “They re very engaged within our community and with our chamber. So I don’t see them going away anytime soon.”
CHAT News attempted to speak with Aurora Cannabis on Friday, but were instead provided a statement, which clarified its position from Thursday.
“There has been no halt to construction at the facility,” wrote Michelle Lefler, VP Communications at Aurora, on Friday. “We are continuing to build with adjusted timelines that are more closely aligned with how cannabis markets develop.
The statement continues, “We expect to have at least six flower rooms completed and in operation in 2020, for a total of 238,000 square feet, which includes the mother room. As was done with Aurora Sky and is the case with all Sky-Class facilities, we will pursue a phased approach to bringing additional grow rooms online, and still intend to build 30 grow rooms at Sun.”
“Additional operations at the facility will be activated as global demand develops, with a target date for full operations in 2021. Previously, we had intended to build at an accelerated speed. This is a more normalized pace for a project of this size and is aligned with how markets are growing.”
The company adds they remain committed to investment in Medicine Hat, and still intends to hire around 800 people to work at the facility once its completed.
Clugston adds he remains optimistic about the facility being completed.
We remain committed to investment in the Medicine Hat community as planned. At this time, we still intend to hire a final staff complement of around 800 people upon facility completion. We want to make sure that all local and government partners continue to work with us to support our commitments to significant investment in Alberta’s economy.
“As an optimist, they’ve shown interest and invested obviously a lot of money in the facility, and I really do hope and believe that it will be up and running at 100 per cent,” he said.
Clugston says council will meet with Aurora executives in a closed-door session prior to Monday’s city council meeting. He adds the meeting was planned before Thursday’s announcement.
CN conductors union gives 72-hour strike notice
Canadian National Railways conductors, trainpersons and yardpersons have given strike notice ahead of a Tuesday deadline.
The union, which represents 3,200 workers, provided the 72-hour notice today as contract negotiations continue over the weekend.
The Teamsters Canada Rail Conference warned in October it was prepared to launch job action after over six months of unsuccessful talks.
A strike could begin at 12:01 a.m. on Nov. 19 now that the notice has been provided.
The company says its offer to enter into binding arbitration was declined by the union.
The workers, who are mostly located in major urban centres across Canada, have been without a contract since July 23.
CN Rail confirms layoffs
A spokesperson for CN said some employees would be placed on furlough and management and union job numbers would be cut “due to a weakening of many sectors of the economy.”
“These adjustments have already started to take place across the network,” senior media relations adviser Alexandre Boulé said in an emailed statement.
“CN would like to express gratitude to the employees who will be leaving the company and thank them for their service.”
He would not confirm how many jobs would be affected.
The news was first reported by the Globe and Mail on Friday afternoon, citing a source that was not authorized to speak publicly. The Globe reported that there would be roughly 1,600 job losses in North America.
According to its website, CN transports more than $250 billion worth of goods annually across its 32,000-kilometre rail network within Canada and the U.S.
The company says it has about 24,000 staff.
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