Facebook (FB) CEO Mark Zuckerberg emerged from a grilling Wednesday on Capitol Hill, where members of the House Financial Services Committee blasted him over plans to create a new cryptocurrency, among a host of other issues.
Yet despite the barrage of criticism, Zuckerberg does have at least one friend in the Senate. Recently, South Dakota Republican Mike Rounds wrote a letter to a Libra Association member, Anchorage Trust Company, urging them to “persevere” amid the backlash.
In recent weeks, as a number of high profile founding members have backed out of the controversial initiative, Rounds wrote that he was puzzled by the backlash — adding that Libra has the “potential to benefit consumers across the globe.”
“What we're talking about is not trying to identify and pick a winner or loser, what we're saying is the concept of this cryptocurrency is for real and it's not going to go away,” said Rounds on Yahoo Finance’s “YFi PM.”
Rounds’ support for Libra stems from concerns that the U.S. will be left behind other countries when it comes to digital payments. He cited statistics from a Bain study that revealed more than 80% Chinese consumers used mobile payments last year, compared to a slim 10% in the U.S.
“I think right now if you take a look at where China's at, where the entire continent of Africa is at with regard to mobile payments, you find that it is something in which other countries are skipping to a new technology in which transactions are being handled,” he said. “And they're using cryptocurrency technology.”
The senator believes cryptocurrency helps make small and point-of-sale transactions become efficient and inexpensive.
“So I just don't think that the rest of the world should continue on this path with the United States and our consumers here not being able to benefit from those less expensive ways of doing business,” he said.
Widespread skepticism in Congress
However, Rounds’ bullishness isn’t shared by many of his Congressional colleagues, who pelted Zuckerberg on Wednesday with all sorts of pointed questions about Facebook’s crypto ambitions.
On Wednesday, Arkansas Rep. French Hill asked why the platform was using a basket of currencies to stabilize Libra, and why it wasn’t based in the U.S. instead of Geneva, Switzerland. Zuckerberg responded that Libra “would primarily be [based on] American dollars”
Rounds told Yahoo Finance that outdated U.S. regulation is stifling the balance between innovation and protecting consumers.
“Based on the regulatory environment today that we have, we're really looking at a 1933 law” that governs financial transactions, Rounds said. He added that given modern technological advances, “we need to upgrade it.”
The People’s Bank of China announced earlier this year that it was working on a digital currency backed by the yuan, taking after Facebook’s Libra announcement. It will be used by payment platforms like WeChat (TCEHY) and Alipay (BABA).
Rounds urged that the U.S. should not cede cryptocurrency leadership to China. He urged the U.S. to become more competitive in this space — saying that it wasn’t about picking the winners and losers.
“This is an innovative approach — more than one will come in, but most certainly we shouldn't let it be created and innovated just in other parts of the world,” the senator said.
“We should play a part in that,” Rounds added.
Grete Suarez is producer at Yahoo Finance for YFi PM and The Ticker. Follow her on Twitter: @GreteSuarez