There was much skepticism and criticism — with some concerns raised more pointedly than others — during a House Financial Services Committee hearing on Facebook’s plans for its Libra cryptocurrency. David Marcus, head of Facebook’s new Calibra crypto wallet subsidiary, addressed concerns related to regulation and the cryptocurrency’s potential impact on the U.S. dollar during the committee hearing on Wednesday (July 17).
California Rep. Brad Sherman, however, wanted Facebook CEO Mark Zuckerberg to come before Congress. Sherman said per reports that Zuckerberg “needs to be an advocate for privacy and so he is creating a device which will provide privacy to drug dealers, human traffickers, terrorists, tax evaders and sanctions evaders.” He also compared the consequences that could come from Libra to 9/11. The lawmaker said that “this may do more to endanger America than even that.”
Others also met Facebook’s plan with criticism and cautioned against a move-fast-and-break-things type approach. “This is not Silicon Valley,” New York Rep. Nydia Velazquez said per reports. “You cannot work out problems as you go.” Other legislators inquired how Libra could impact the U.S. dollar’s strength. Kentucky Rep. Andy Barr wanted to know how the digital currency would not weaken central bank power and sovereign currencies.
Marcus responded to Barr’s concern by saying, “I want to be very clear, we do not want to compete with the dollar or with sovereign currencies.” The executive continued, “This is why they make the reserve. And even in our wildest dreams, never will we come anywhere close from the size of any of the currencies that you mentioned.”
Velasquez, along with New York Rep. Carolyn Maloney and House Financial Services Committee Chairwoman Maxine Waters, wanted to know if Marcus would stop moving forward with the crypto project until the time that policymakers could put into place appropriate regulations. Marcus responded, “I committed to waiting for us to have all the appropriate regulatory approvals and have addressed all concerns before moving forward.”
While Maloney inquired if Marcus would agree to a pilot launch of Libra with 1 million users along with the oversight of regulators, the executive noted that the company devised this plan along with a white paper before the full release of Libra to go through regulators. But Maloney said she doesn’t believe the company should roll out Libra “because the creation of a new currency is a core government function.” The lawmaker added, “But at the very least you should agree to do this small pilot program first.”
The House hearing comes as Marcus faced a barrage of questions from the Senate on Tuesday (July 16), some of which were rather complex and involved. Lawmakers wanted to know why Libra was headquartered in Switzerland and if developers who want to work with Libra be vetted. They also wanted to know if Libra will be interoperable with wallets that compete with Calibra, among other inquiries, as lawmakers expressed their criticism and skepticism of the plan.