February 27, 2024

Mark Zuckerberg speaks in Congress in defense of Libra

Mark Zuckerberg speaks in Congress in defense of Libra

Today, October 23, Mark Zuckerberg appeared before congressmen, who asked him questions of interest to themquestions and commented onLibra project. At the hearing, Facebook’s CEO reiterated that he wouldn’t launch a stable currency until all regulators received approval.

Most congressmen have expressedconcern that Libra is headquartered not in the United States, but in Switzerland, as well as regarding previous leaks of private information that have occurred on Facebook. In particular, Congresswoman Velazquez said:

You have lost huge personal informationthe number of your users. You have no guarantee that this will not happen again. Why should we believe that you want to protect the rights of clients when this is obviously not the case?

In addition, some of the board membersConcerned about the possible consequences of launching an anonymous Calibra wallet. According to them, the wallet cannot be completely anonymous and at the same time comply with all necessary standards, such as AML / KYC. In addition, some of them doubted that Libra generally has the potential to comply with these standards, since the large payment systems that were responsible for developing the compliance solutions left the association. Congressman Maloney said:

You are currently creating a new currency,potentially anonymous. With it, it will be possible to hide criminal activity, and this is the number one problem. Obviously, criminals will use Libra. In the event that your wallet is not transparent, its users will often be suspected.

According to the head of Facebook, several paymentcompanies are still members of the Libra Association, in addition, the development of a solution for compliance with the law is carried out by David Marcus personally, who previously led PayPal. He said members of the association have invested billions of dollars in developing mechanisms to combat money laundering and terrorist financing.

In addition, Zuckerberg once again stated that the Libra project will notrun until it receives full approval fromAccording to him, the goal of the project is to create a currency that would take full advantage of innovative technologies, but at the same time would comply with all regulatory standards, which is why compliance with the law is a priority for the project. 

Mark also emphasized several times that the newstable coin is not a competitor to sovereign currencies. According to him, Libra will cooperate with central banks around the world so that the project does not harm the monetary system.

Some congressmen expressed concernsabout the centralization of the association and the consequences of this centralization. However, according to Zuckerberg, Facebook management has no control over the Libra Association. The management of the social network will not be able to influence the decisions of members of the association, as well as the process of their selection. 

In response, Rep. Juan Vargassaid that the Libra Association cannot exist without Facebook. He also noted that most of the key participants have already left the association, so power on the newly created board of directors rests entirely with Mark Zuckerberg. 

It is worth noting that many of the legislatorsnoted the potential of blockchain and cryptocurrencies, and also emphasized the fact that the United States should be the leader in this new area. In addition, many of them expressed the need for the early introduction of clear cryptocurrency regulation.