Hearing on Libra cryptocurrency in front of the U.S. House Committee on Financial Services
On July 17, Facebook’s main person for the blockchain development, and the CEO of the Facebook subsidiary Calibra, David Marcus testified in front of the US House Committee on Financial Services. Title of the hearing was: ‘Examining Facebook’s Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System’. In its two-days long hearing, Mr Marcus tried to address the questions from the bipartisan committee led by the chairwoman, Maxine Waters. The US regulators were interested in the scope of regulation that can apply to the Facebooks’ proposed cryptocurrency Libra. Mr Marcus, ensure the committee that the implementation of the Libra project will not start until all regulatory requirements are met. Mr Marcus, pointed out that Libra Association (proposed organisation to control the Libra cryptocurrency) will be based in Geneva, Switzerland, in recognition of the global importance of Geneva as a place of many important international organisations. On the other hand, he pointed out the Swiss willingness to innovate in the field of digital asset management and regulation their regulation.
Mr Marcus pointed out that Libra Association is working closely with the Bank for International Settlements (BIS), G7 Financial Stability Board, Financial Action Task Force (FATF), alongside the Swiss Financial Market Supervisory Authority FINMA, and Financial Crimes Enforcement Network FINCEN (in the US) in order to set the jurisdiction and overview. This is mostly to comply with the worldwide anti-money laundering rules, and rules for preventing financing of terrorism.
On the question of privacy of financial transactions made inside the Libra cryptocurrency network, and possibly misuse of such data, Marcus explained that Facebook is creating subsidiary company called: Calibra, which will be working on developing the electronic wallets for Libra cryptocurrency , and managing the financial data. Data processed by the Calibra company will not be cross referenced with the data users are sharing on Facebook’s social-network at-large (Facebook.co is in ownership of WhatsApp and Instagram also) , He also added that Libra Association will most likely be regulated by the Swiss Federal Data Protection and Information Commissioner (FDPIC).
Libra is proposing the consortium of 100 companies that will participate in Libra association and become the part of the payment network.
Mr Marcus added that Libra will not compete with the sovereign currency and it is not into banking, but rather portrayed the Libra as a payment service similar to the PayPal or WeChat.