David Marcus, the head of Facebook’s blockchain department and the face of its proposed cryptocurrency Libra, has released his congressional testimony ahead of a scheduled appearance before Congress, according to a report by TechCrunch.
Marcus said the Swiss government will regulate Libra because that’s where it’s going to be headquartered, and that the Libra Association and the Calibra wallet will follow all U.S. monetary regulations in terms of taxes, fraud and money laundering laws.
“The Libra Association expects that it will be licensed, regulated, and subject to supervisory oversight. Because the Association is headquartered in Geneva, it will be supervised by the Swiss Financial Markets Supervisory Authority (FINMA),” Marcus said. “We have had preliminary discussions with FINMA and expect to engage with them on an appropriate regulatory framework for the Libra Association. The Association also intends to register with FinCEN [The U.S. Treasury Department’s Financial Crimes Enforcement Network] as a money services business.”
Marcus is scheduled to appear before the Senate Banking Committee on July 16 and the House Financial Services Committee on July 17. House Financial Services Committee Chairwoman Rep. Maxine Waters, has already asked that Facebook stop the development of Libra “until regulators and Congress have an opportunity to examine these issues and take action.”
There has been talk from regulators and governments all over the world about fears of whether Libra will upend already entrenched financial policy or be a hotbed for money laundering and other criminal enterprises.
“The Libra Association, which will manage the Reserve, has no intention of competing with any sovereign currencies or entering the monetary policy arena,” Marcus said. “It will work with the Federal Reserve and other central banks to make sure Libra does not compete with sovereign currencies or interfere with monetary policy. Monetary policy is properly the province of central banks.”
U.S. President Donald Trump recently criticized the currency on Twitter, saying, “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity. Similarly, Facebook Libra’s ‘virtual currency’ will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International.”
Marcus said the currency will follow all laws regarding customer information and money laundering.
“The Libra Association is similarly committed to supporting efforts by regulators, central banks, and lawmakers to ensure that Libra contributes to the fight against money laundering, terrorism financing, and more,” Marcus said. “The Libra Association will also maintain policies and procedures with respect to AML and the Bank Secrecy Act, combating the financing of terrorism, and other national security-related laws, with which its members will be required to comply if they choose to provide financial services on the Libra network.”