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On July 16th, the head of Facebook’s Project Libra, David Marcus, had testified in front of the Senate to talk about the Stablecoins are a class of cryptocurrency that aims to provide price stability. A perceived drawback of cryptocurrency is price volatility.... More. There, Marcus was questioned by multiple Senators, all trying their damnedest to learn a bit more about Libra and Facebook’s intentions with it. However, some are being more outspoken than others.
Speaking early on in the conference was one Sherrod Brown, the left-leaning Senator of Ohio. He opened by going directly after Facebook and its recent missteps. “Facebook is dangerous,” says the Senator. Brown went on, listing multiple situations where the social media company has failed to protect user data. “Facebook has said just trust us, and every time Americans trust you, they seem to get burned.”
His point hits home. After all of the times Facebook has “abused the public’s trust,” Brown wants Marcus to tell him why people should trust Facebook to manage their money. The head of Libra, of course, counters by saying trust is the most crucial thing to Facebook regarding its cryptocurrency. “We’ve invested in a number of programs, notably on privacy, election integrity,” continues Marcus. The head then gets into the real answer:
“The reason we designed Libra in such a way that Facebook will only be one among a hundred different members of the Libra Association and will have no special privilege means that you will not have to trust Facebook.”
Brown isn’t hearing it. The Senator interrupts Marcus and claims that despite so many companies like MasterCard and PayPal participating in Libra, none of them have “access to 2 billion people” as Facebook does. He then calls Facebook “delusional” for expecting people to trust them with their assets after all of these breaches.
Ohio’s Democratic representative continues into other ground. He then asks Marcus if he and the team working on the project will accept their paychecks in Libra. Marcus starts with a non-answer, saying that “Libra is not designed to compete with bank accounts.”
Brown interrupts again and reiterates the question, in which Marcus repeats his non-answer. Marcus then tries to divert, saying that he would trust all of his assets in Libra. He then finally says he would trust getting his salary paid in it as well since the digital asset is “backed 1:1 with a reserve.”
Finally, Brown moves onto his final question. He opens by saying he thinks that this entire project is “a bad idea.” He then goes into how other governmental parties in the room have asked Facebook to give up on the project entirely. The Senator even references President Donald Trump’s recent tweets on the matter before asking if there is “anything elected leaders and officials” can say that would convince Facebook not to launch the project.
Marcus answers by saying the team agrees with these concerns. But, he redirects critics to the Libra whitepaper to find their answers. He goes on, saying that the Libra team will take any steps necessary to hit regulatory goals. Brown responds, bringing up the economic crash from a decade ago. He refers to the officials again, stating that all of them have lived through that crash. They’ve learned from it and don’t want anything like it to happen again. If they all told Marcus that Libra is a bad idea and Facebook shouldn’t launch it, would they anyways?
Marcus responds by referring to his commitment to reaching regulatory concerns yet again. But, he says that if those concerns are never adequately addressed, the lead and his team will keep working until they are.
To a degree, it’s possible that Marcus is being honest about the project. Libra is starting on regulated platforms. WhatsApp, Messenger, and Instagram exist under current tech regulation laws right now. It would be inaccessible otherwise. Speaking more on this is Marc Boiron, a blockchain lawyer over at FisherBroyles. In an e-mail to BeInCrypto, Boiron shares his thoughts on regulation regarding the project:
“All of the applications that give access to the Libra currency will be highly regulated, which means that the Libra currency likely will not be accessible in an unregulated manner. I also would not be surprised to see new regulations that likely will be narrowly focused on any cryptocurrency that can have an impact on monetary policy or financial stability but it is difficult to say in what form those regulations will come.”
What do you think about Libra and the future of cryptocurrency regulation? Do you think David Marcus is telling the truth about his team’s intentions? Or, is he just saying this stuff to try and reassure critics? Let us know in the comments below!
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