During the hearing on Libra with the Financial Services Committee of the United States House of Representatives, David Marcus, CEO of Facebook’s crypto wallet Calibra, stated that Libra will not be launched before all regulatory concerns were addressed.

Facebook's David Marcus testifies on Libra cryptocurrency – 07/17/2019

This is the second day of the hearings on Facebook’s Libra project and it started with the committee’s chairwoman Rep. Maxine Waters once again asking Facebook to sign a moratorium, stating “until Congress enacts an appropriate legal framework to ensure that Libra and Calibra do what you claim it will do”. Marcus did not agree to the moratorium, but did answer that they will “take the time to get this right.” At one point Rep. Carolyn Maloney raised the same question, to which Marcus responded the same way.

One question that received an “Absolutely!” answer from Marcus was from Rep. Nydia Velazquez, who asked “Will you commit yourself to not launch before all the concerns from the Federal Reserve and other regulators are addressed?”

When the question of money laundering, and how Libra will protect the financial system came up from Rep. David Scott, Marcus once again pointed out that to open a Calibra account a person will need to go through a KYC program, and upload a government issued ID. He also said that blockchain technology can provide additional information to law enforcement and regulators, compared to the current system.

Rep. Jim A. Himes pointed out that the Libra’s basket of currencies will make its user experience “foreign currency risk “, and then asked how will the company make this risk transparent. Marcus assured the representative that Facebook will have educational tools built in place to inform Libra and Calibra’s users. During this exchange, Marcus also mentioned that the 50% of the “basket of currencies” will consist of USD.

Throughout the hearing, numerous representatives asked if Libra, and the Libra association, should be regulated as a bank, considering that some of its services will be similar to that of a bank. Marcus repeatedly answered that Libra will be a payment tool, and does not wish to compete with banks, but should it ever enter into providing banking services, then yes, at that point it should be regulated the same way.

Discussion

avatar