A Facebook executive in charge of rolling out the social media company’s new cryptocurrency appeared before the House Financial Services Committee last week. Its members didn’t seem particularly impressed.
David Marcus, CEO of Calibra, appeared before the committee for testimony on July 17. Facebook has said Libra — a cryptocurrency whose value will be backed by a “basket” of government-issued currencies — will be available sometime in 2020.
Congressman Patrick McHenry, R-North Carolina, said he worried that Libra would help Facebook become “an unstoppable force.”
Concern was also expressed that Libra’s ties to the U.S. dollar will cause more volatility in the market and raise interest rates. Marcus, for his part, stressed that consumer protection and data privacy is Facebook’s highest priority.
Cryptocurrencies have gained some reputation for facilitating payments for illegal activity such as illicit drugs or terrorism. Responding to questions on this point from the committee, Marcus said the Libra Association, a conglomerate of companies that will govern the currency, will “implement safeguards that require service providers in the Libra network to fight money laundering, terrorism funding, and other financial crimes.”
Marcus told the committee that Facebook is “fully committed to working with regulators here and around the world.” Marcus also pledged to Rep. Maxine Waters, D-California, chairwoman of the committee, that “Facebook will not offer the Libra digital currency until we have fully addressed regulators’ concerns and received appropriate approvals.”
Further, Marcus asserted that Libra will be a force for good, saying it will be a safe, secure, and low-cost way of sending money around the world to the unbanked population.
“Imagine a daughter who wants to send money home to her mother in another country,” he said. “With that $200 that she sends, $14 on average will be lost because of fees. It can take several days or a week for the mother to receive the money, a delay which can prove disastrous in an emergency.”
When asked by a committee member, however, Marcus could not come up with the exact number of Facebook users that are currently unbanked.
Photo by Pexels.