On Tuesday, at 10 a.m. PT/1 p.m. ET, Facebook’s David Marcus will stand before the U.S. Senate Banking Committee and explain Facebook’s vision for Libra cryptocurrency.
It won’t be an easy task. Amongst the U.S. lawmakers and finance institutions, Libra has mostly been met with skepticism. President Trump said Libra will have “little standing or dependability” and suggested Facebook seek a banking charter if it wants to “become a bank.” A draft bill circulating among some members of the Congress looks to completely ban Facebook from having anything to do with cryptocurrencies.
We already know what Marcus is going to say in his opening remarks; the document has been published online. In a nutshell, it’s a short primer on the structure and management of Libra, the cryptocurrency, as well as Calibra, Facebook’s digital wallet that will be integrated in Facebook’s myriad apps and services.
Besides outlining what Libra and Calibra do and how they’re managed, Marcus will also try to calm the Senators by pointing out that the company, together with its Libra partners, are all for regulation, and that the initial papers on Libra have already been launched, so there’s more than enough time to work out the details. “Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals,” he wrote.
There’s also an obligatory dose of patriotism coupled with warnings of “others” taking the lead on digital currencies. While the Libra Foundation is based in Switzerland, Marcus says he’s proud Facebook has initiated the effort in the United States (notably, most of Facebook’s partners on Libra are U.S. companies as well). “I believe that if America does not lead innovation in the digital currency and payments area, others will. If we fail to act, we could soon see a digital currency controlled by others whose values are dramatically different,” he wrote.
But the most interesting part of the hearing will surely be what comes after Marcus’ initial remarks: The questions from Senators.
As we’ve learned from Mark Zuckerberg’s appearance before the U.S. Congress in 2018, these hearings can get unintentionally funny, even bizarre, as the politicians and lawmakers struggle with the complexities of modern technologies. And wrapping one’s head around Libra isn’t an easy task: It consists of a Swiss-based foundation which hasn’t been fully formed yet, a complex blockchain platform, a stablecoin backed by a basket of real-world assets, and a digital wallet that will enable Facebook’s users to send and receive digital currency.
But you can bet everyone present will take the hearing seriously. Last time Facebook was on the stand like this, it was about its many violations of user privacy — violations for which the social networking giant was recently fined $5 billion.
Lawmakers’ sentiment towards Facebook’s digital money effort will surely be frosty, if not downright hostile. And the stakes are arguably higher this time around; some, including the U.S. President, consider Libra to be an attack on the dollar, and no U.S. lawmaker wants to make a decision that will ultimately weaken the U.S. currency.
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