Tech

Amazon would be a better choice than Facebook to develop Libra, author Ben Mezrich says

Key Points
  • "You can't have a bank, you can't be a new currency without people trusting it if you're going to sit in the middle of it, and people don't trust Facebook," Ben Mezrich said on "Squawk Box."
  • Mezrich, whose book "Accidental Billionaires" was the basis for the movie "The Social Network," said it would make more sense for Amazon to lead the project instead.
Libra is crypto for the masses, but Facebook needs to build trust, says "Bitcoin Billionaires" author
VIDEO7:4307:43
Libra is crypto for the masses, but Facebook needs to build trust, says "Bitcoin Billionaires" author

The author of books about the early days of Facebook and Bitcoin said Thursday that the wrong tech giant is leading the charge to create Libra, a new cryptocurrency.

"This is all about trust. You can't have a bank, you can't be a new currency without people trusting it if you're going to sit in the middle of it, and people don't trust Facebook," Ben Mezrich said on CNBC's "Squawk Box."

Mezrich, whose book "Accidental Billionaires" was the basis for the movie "The Social Network," said it would make more sense for Amazon to lead the project instead.

"I think that Amazon could pull this off because for whatever reason we all trust Amazon," Ben Mezrich said. "We put our credit cards in there everyday."

Facebook announced last month that it was developing Libra, with dozens of other companies signing on to the project. The social media giant has said it will not run the currency once it is launched, with Libra instead being managed by a nonprofit based in Switzerland.

Both Democratic and Republican lawmakers have been critical of the project, with many mentioning Facebook's past scandals involving user data.

David Marcus, the head of the Facebook team developing Libra, testified before Congress for two days this week. Some members of Congress asked Marcus if he would pause or scale down the project while the federal government figured out how to regulate it.

"I don't think you should launch Libra at all, because the creation of a new currency is a core government function," Rep. Carolyn Maloney, D-N.Y., said to Marcus. "But at the very least you should agree to do this small pilot program first."

Mezrich said he thinks Amazon would be subject to less scrutiny than Facebook. "Regulators would be on them, but it wouldn't be like this."

Mezrich, whose book "Bitcoin Billionaires" came out in May, said Libra would not be a true cryptocurrency because it would involve financial mediators. He said it could, however, serve as an "on ramp" to bitcoin for people unfamiliar with cryptocurrencies.