Hillicon Valley: Facebook unveils new cryptocurrency | Waters wants company to halt plans | Democrats look to force votes on election security | Advertisers partner with tech giants on 'digital safety' | House GOP unveils cyber agenda

Welcome to Hillicon Valley, The Hill’s newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley. If you don’t already, be sure to sign up for our newsletter with this LINK.

Welcome! Follow the cyber team, Olivia Beavers (@olivia_beavers) and Maggie Miller (@magmill95), and the tech team, Harper Neidig (@hneidig) and Emily Birnbaum (@birnbaum_e).

 

FACEBOOK’S CRYPTIC CRYPTO: Facebook on Tuesday announced its plans to create a new cryptocurrency called Libra, saying it hopes to make transferring money as easy as sending a text message.

Calibra, a new subsidiary of the social media giant, rolled out the alternative financial system with a website and white paper in an effort to get the cryptocurrency up and running by 2020.

“Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people,” the white paper reads.

One big issue: The new digital-native financial system is certain to draw scrutiny from lawmakers and regulators who have been criticizing Facebook over its handling of data privacy and potential antitrust issues.

But executives are assuring reporters that none of the financial customer data collected by Calibra will be shared with any other Facebook subsidiary.

“Your social data on Facebook is kept separate from Calibra data,” Kevin Weil, Calibra’s vice president of product, said, according to The Washington Post. “This is not about improving ad targeting. We’re trying to draw a bright red line.”

Financial regulators have showed increasing interest in regulating cryptocurrencies, saying they leave the door open to large-scale fraud and potentially criminal transactions. 

Why Facebook says Libra will be different: Libra’s blockchain technology will allow users to hold addresses that are not linked to their real-world identity. The cryptocurrency will also be backed by government currencies like the dollar to make it more “stable” than other cryptocurrencies like Bitcoin.  

The effort will be led by the Libra Association, a nonprofit in Switzerland that will operate separately from Facebook. Facebook will be one of dozens of companies with voting power in the project.

As of Tuesday, Libra is backed by 28 diverse companies including Uber, Mastercard, Spotify, Vodafone, Coinbase and Women’s World Banking. Each of the partners are expected to invest at least $10 million in the cryptocurrency.

Libra will be available in Facebook’s messaging services, Messenger and WhatsApp, as well as a separate app.

Read more here.

 

NOT SO FAST, FACEBOOK: House Financial Services Committee Chairwoman Maxine WatersMaxine Moore WatersFive memorable moments from Sarah Sanders at the White House Five memorable moments from Sarah Sanders at the White House Dems eye repeal of Justice rule barring presidential indictments MORE (D-Calif.) on Tuesday called on Facebook to halt its new cryptocurrency project until regulators and Congress weigh in on the endeavor.

In a statement, Waters said that the social media giant should back away from the financial services industry because of the company’s repeated privacy breaches, alleged violation of consumer protection laws, and a string of other controversies involving user data.

“With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users,” Waters said in a Tuesday statement.

“Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action.”

Republicans also wary: Rep. Patrick McHenryPatrick Timothy McHenryLawmakers battle over HUD protections for homeless transgender people Lawmakers battle over HUD protections for homeless transgender people Ben Carson decries ‘gotcha’ politics: ‘Give me a break’ MORE (R-N.C.), ranking Republican on the Financial Services panel, asked Waters in a Tuesday letter to hold a hearing on Project Libra and “its potential unprecedented impact on the global financial system.”

Waters also wants Facebook executives to appear before her panel to discuss the project.

More on the lawmaker scrutiny here.

 

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‘MAKE WAY, MITCH’: Senate Democrats will try to force votes on additional election security legislation as they aim to pressure Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellJon Stewart rips into McConnell for saying he’s ‘bent out of shape’ over 9/11 victim fund Jon Stewart rips into McConnell for saying he’s ‘bent out of shape’ over 9/11 victim fund Tensions with Iran reach new stage over uranium threat MORE (R-Ky.) into taking action on the issue.

Senate Minority Leader Charles SchumerCharles (Chuck) Ellis SchumerEx-state senator in North Carolina enters race against Tillis Ex-state senator in North Carolina enters race against Tillis Election security bills face GOP buzzsaw MORE (D-N.Y.) told reporters Tuesday that Democrats will go to the floor to try to bring up the bills by unanimous consent, a move that will force a GOP senator to come to the floor and block the bills or let them pass.

“We’re going to hold stand-alone votes on the many bills that already exist on election security,” Schumer told reporters, outlining the Senate Democrats’ strategy.

The New York senator added that Democrats would push for additional election security funding in the upcoming budget and appropriations negotiations. House Democrats included $600 million for the Election Assistance Commission in an appropriations bill.

Schumer didn’t specify what level of funding Senate Democrats will ask for, except that it will be “more robust.”

“It is Congress’s solemn obligation to protect our elections … and any leader who doesn’t do that is abdicating their responsibilities to our grand democracy,” Schumer added on Tuesday.

The Senate is expected to start debate on the National Defense Authorization Act this week. Democrats have offered some election security-related amendments, but it’s unclear if they’ll be allowed to come up for a vote.

Read more here.

 

HOUSE GOP’S CYBER AGENDA: Republicans on the House Homeland Security Committee are gearing up to introduce a bevy of bills aimed at enhancing the Department of Homeland Security’s (DHS) cybersecurity capabilities.

The bills are the first glimpse into the new “American Security Agenda” that committee Republicans plan to pursue this Congress.

In prepared remarks from Rep. Mike RogersMichael (Mike) Dennis RogersDem proposal to ban Pentagon funds for border wall survives House panel votes Dem proposal to ban Pentagon funds for border wall survives House panel votes House panel OKs space military branch MORE (R-Ala.), the ranking member of the Homeland Security Committee, for the International Summit on Borders in Washington, D.C. on Tuesday, the goal of the agenda is to “take a hard look at the Department’s missions and act to ensure that DHS is prepared to tackle the emerging threats to our homeland,” including threats to social media, satellites and theft of intellectual property.

Republican members of the committee plan to introduce seven bills in the coming weeks, with several specifically focused on cybersecurity.

The bills: Rep. Pete KingPeter (Pete) Thomas KingGOP congressman: Trump should have been ‘above’ attacking Pelosi at Normandy Democratic lawmaker: Trump shouldn’t be allowed to attend D-Day ceremony GOP lawmakers say Trump wrong to criticize Biden in Japan MORE (R-N.Y.) will reintroduce the Securing the Homeland Security Supply Chain Act, which would enable DHS to keep products from vendors that pose national security risks out of U.S. supply chains.

Rep. Debbie Lesko (R-Ariz.) will introduce the Pipeline Security Enhancement Act, which would give DHS’s Transportation Security Administration (TSA) the power to inspect and improve the physical security and cybersecurity of U.S. pipelines.

And the cybersecurity subcommittee’s ranking member, Rep. John KatkoJohn Michael KatkoHouse conservative’s procedural protest met with bipartisan gripes House conservative’s procedural protest met with bipartisan gripes There is a severe physician shortage and it will only worsen MORE (R-N.Y.), will introduce the State and Local Cybersecurity Improvement Act. This legislation is designed to help DHS and its local government partners bolster their cybersecurity resiliency capacity by authorizing grants and technical assistance.

Rep. Michael McCaulMichael Thomas McCaulHouse Dems introduce resolutions to block Trump’s Saudi arms sales Hillicon Valley: Democratic state AGs sue to block T-Mobile-Sprint merger | House kicks off tech antitrust probe | Maine law shakes up privacy debate | Senators ask McConnell to bring net neutrality to a vote Hillicon Valley: Democratic state AGs sue to block T-Mobile-Sprint merger | House kicks off tech antitrust probe | Maine law shakes up privacy debate | Senators ask McConnell to bring net neutrality to a vote MORE (R-Texas), the former chairman of the Homeland Security Committee, will introduce legislation to formally reauthorize the Biometric Identification Transnational Migration Alert Program, which allows DHS’s Immigration and Customs Enforcement (ICE) agency to compile data on violent criminals, terrorists and fugitives and scan migrants at the border.

Three other bills set to be introduced by GOP Homeland Security committee members will help TSA identify emerging threats to the transportation system and reform DHS’s structure and management.

Read more here.

 

STATE AGs DEMAND ACTION ON ELECTION SECURITY: Twenty-two Democrat state attorneys general demanded Tuesday that Congress take action to secure election systems ahead of the 2020 vote.

The group of attorneys general, led by Minnesota’s Keith EllisonKeith Maurice EllisonDemocrats face new civil war in primary fight 18 state attorneys general call on Justice Dept to release Mueller report Keith Ellison: Evidence points to Trump being ‘sympathetic’ to white nationalist point of view MORE, sent a letter to the leaders from each party of the Senate Appropriations Committee and the Senate Rules Committee begging them to work together to bolster election security in the states, including passing legislation.

“Our state and local election officials are on the front-lines of the fight to protect our election infrastructure, but they lack the resources necessary to combat a sophisticated foreign adversary like Russia,” they wrote.

The group of attorneys general, which were exclusively Democrats, asked the senators for “sustained” federal funding to secure election infrastructure against potential interference, for updating the equipment itself and for information technology and cybersecurity training for election officials.

They also asked that Congress “support the establishment of cybersecurity and audit standards for election systems,” and argued that the federal government needs to keep state election officials informed about suspected breaches and other security intelligence.

Read more here.

 

FLORIDA TAKES ACTION: Gov. Ron DeSantisRonald Dion DeSantisTrump: Americans ‘are demanding that Sanctuary Cities be GONE’ Trump: Americans ‘are demanding that Sanctuary Cities be GONE’ DeSantis signs bill banning sanctuary cities MORE (R) on Tuesday announced a $5.1 million statewide initiative aimed at securing Florida’s voting systems against cyberattacks ahead of the 2020 elections.

Florida Secretary of State Laurel Lee and all 67 supervisors of elections throughout the state will participate in the program, with the goal of eliminating “any vulnerabilities in our elections infrastructure,” DeSantis said in a statement.

The Florida Department of State will distribute $2.3 million to election supervisors to make security improvements, adding to the $2.8 million for election security efforts already approved by the state legislature as part of the fiscal 2020 budget.

The Florida State Department, in partnership with election supervisors, will conduct assessments of state voting systems ahead of the primaries in March. The agency will also begin regularly monitoring election supervisors’ networks to check for vulnerabilities. Cybersecurity training and information technology support will be offered to election officials.

The announcement of the program comes a month after DeSantis directed Lee to conduct an election security review of state voting systems. That move came after DeSantis said hackers gained access to voting databases in two counties during the 2016 elections.

Read more here.

 

AD INDUSTRY TEAMS UP WITH BIG TECH: Some of the world’s biggest advertisers are partnering with internet platforms like Facebook and Google to try to “rapidly improve digital safety.”

Members of the World Federation of Advertising, a global ad trade group, announced on Tuesday they had teamed up with tech and media companies to form a group called the Global Alliance for Responsible Media.

“With nearly 3.8 billion people online, the world is increasingly connected, and yet the increase in dangerous, hateful, disruptive and fake content online risks threatening our global community,” the alliance said in a press release announcing the move. “Members of the Global Alliance for Responsible Media recognize the role that advertisers can play in collectively pushing to improve the safety of online environments.”

What will they do? Good question… The announcement wasn’t clear on what actions the new coalition will be taking, but the focus of the collaboration will be to pressure companies like Facebook and Google to clean up their platforms. The Alliance will also work “to develop and deliver against a concrete set of actions, processes and protocols for protecting brands.”

Among those in the partnership include major advertisers like Adidas, General Mills, Nestlé and Proctor & Gamble (P&G), as well as several trade associations and ad agencies. And the media platforms involved include Facebook, Google, Twitter and Verizon Media.

The move comes at a time when Google and Facebook, the internet’s two largest advertising platforms, have been under increasing pressure to purge their sites of hateful, abusive and illicit content.

“We’ve been tolerant for too long,” P&G Chief Brand Officer Marc Pritchard said at an industry conference earlier this year. “It’s not acceptable to have brands showing up where opioids are being offered, where illegal drugs are promoted, where abhorrent behavior is present or where violence is seen. The apologies are heartfelt and appreciated, but that’s not good enough.”

Read more on the coalition here.

 

TECH CEOS URGE CONGRESS TO PASS NEW NAFTA: TechNet, a network of technology CEOs, wrote to Congress on Tuesday expressing their support for President TrumpDonald John TrumpTrump says ‘Failing New York Times’ should be held ‘fully accountable’ over Russia report Trump says ‘Failing New York Times’ should be held ‘fully accountable’ over Russia report Trump tweets ICE will begin removing ‘millions’ of undocumented migrants MORE‘s revised North American trade deal.

The U.S.-Mexico-Canada Agreement (USMCA), which Trump signed to replace the North American Free Trade Agreement (NAFTA) in November, faces an uphill battle in Congress. The letter was sent ahead of U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerChinese, US negotiators fine-tuning details of trade agreement: report The Trump economy keeps roaring ahead Trump says no discussion of extending deadline in Chinese trade talks MORE‘s trip to Congress on Tuesday to give an update on the agreement.

“Much has changed in our economy since the North American Free Trade Agreement (NAFTA) was ratified 24 years ago. Since then, the internet has revolutionized the way we do business, and digital trade has become a major driver of economic growth worldwide,” TechNet’s CEO, Linda Moore, wrote in the letter to the Senate Finance Committee.

A similar letter went to the House Ways & Means Committee, where Lighthizer will testify Wednesday.

The USMCA promotes “market access, boosts digital trade, protects intellectual property and encourages the free flow of data across boarders,” TechNet’s vice president of federal policy, government relations and communications, Alex Burgos, told The Hill on Tuesday.

He added, “it is a net plus for the American economy, American workers and would usher in a new era of economic prosperity for the continent” and that the association “whole-heartedly” supports USMCA and hopes Congress can get it passed as soon as possible.

Read more on the letters here.

 

YANG SAYS TECH BREAKUP WON’T HELP: Entrepreneur and Democratic presidential candidate Andrew YangAndrew Yang2020 Democrats look to cut into Biden’s lead with black voters 2020 Democrats look to cut into Biden’s lead with black voters Juan Williams: Trump’s incredible shrinking GOP MORE warned Tuesday that breaking up big tech companies, an idea that has drawn support from fellow 2020 contenders, wouldn’t address the fundamental problems of social media.

Yang said during an interview with HillTV’s “Rising” that dismantling tech giants like Facebook, which owns Instagram and WhatsApp, wouldn’t fix the negative effect they’re having on teenagers and young people. He added that breaking up major tech firms is a “20th century solution to 21st century problems.”

“Competition would not address some of the fundamental problems like if you look at Facebook, Instagram and WhatsApp,” he said.

Yang acknowledged that while it would make sense for tech giants to divest certain parts of their businesses, he believes that “one of the fundamental problems is that our social media apps are causing higher levels of depression, anxiety among teenagers and breaking up the apps into separate companies does nothing to change that.”

Yang has proposed creating what he calls an “attention economy” department that would focus specifically on how to design and use social media apps more responsibly. This would include age restrictions and guidelines on chat and gaming apps.

“There needs to be some kind of counter weight that looks out for our kids,” he said, referring to the plan.

Read more on Yang’s remarks here.

 

GOOGLE PRESSED OVER TRANSLATION ERROR: Google is facing pushback after a recent translation error switched a phrase to one more in line with the message of the People’s Republic of China amid pro-democracy protests.

Last week, Google Translate reportedly mistranslated the phrase “I am sad to see Hong Kong become part of China” to “I am happy to see Hong Kong become part of China.”

The error, which was corrected the same day, came as hundreds of thousands of protestors marched in the streets, even after leader Carrie Lam shelved a contentious extradition bill, according to the New York Times.

Sen. Josh HawleyJoshua (Josh) David HawleyThe Hill’s Morning Report – Trump and House Democrats resume battle The Hill’s Morning Report – Trump and House Democrats resume battle Trump judicial nominee says he withdrew over ‘gross mischaracterizations’ of record MORE (R-Mo.) sent a letter to Google Tuesday claiming the website may have been “negligent” regarding the recent translation error that he said advanced the “authoritarian government” narrative.

The Hill reached out to Google for comment.

A Google spokesman told Agence France-Presse “these automatic systems can sometimes make unintentional mistakes like translating a negative to a positive.”

Read more here.

 

MARYLAND CYBER ORDER: Maryland Gov. Larry Hogan (R) on Tuesday signed an executive order aimed at strengthening the state’s cybersecurity capabilities, a month after a debilitating ransomware attack on Baltimore city networks disabled several services.

The executive order formally establishes the “Maryland Cyber Defense Initiative” and creates the position of state chief information security officer (SCISO), who will be charged with giving cybersecurity recommendations to the governor.

The order also establishes the Office of Security Management within Maryland’s Department of Information Technology that will coordinate and implement “the overall cybersecurity strategy and policy” for the executive branch of the state government.

The Maryland Cybersecurity Coordinating Council is also established by the order and will provide strategies to implement cybersecurity initiatives and recommendations to the SCISO. It will be made up of state officials including the secretaries of Health, General Services, Transportation, and the director of the Governor’s Office of Homeland Security, among others.

Read more here.

 

AN OP-ED TO CHEW ON: 5G won’t ruin your weather forecast

 

A LIGHTER CLICK: When Congress and your nightmares blend together.

 

NOTABLE LINKS FROM AROUND THE WEB:

Libra, Facebook’s new cryptocurrency, explained. (The Washington Post)

Google puts $1 billion towards building thousands of more homes in the Bay Area. (Blog)

Google’s ad dominance explained in 3 charts. (The Wall Street Journal)

AT&T cuts another 1,800 jobs as it finishes fiber-Internet buildout. (Ars Technica)

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