Facebook says it won’t roll out its Libra cryptocurrency until it has “fully addressed regulatory concerns” – though it added that regulation of the currency itself would largely happen in Switzerland, not the U.S.
In prepared testimony released ahead of his appearance before the Senate Banking Committee on Tuesday, Facebook’s Calibra head David Marcus said regulators should have a say in the cryptocurrency ahead of its launch.
“We know we need to take the time to get this right,” Marcus wrote. “And I want to be clear: Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals.”
Facebook’s plan to launch its own cryptocurrency has major support from giants of the finance industry, including PayPal, Visa, and Mastercard. But lawmakers around the world have expressed skepticism about the social media company’s ability to run and regulate a currency that would exist outside of many federal governments. Both the U.S. House and Senate will hold hearings on Libra this week, and President Donald Trump attacked it on Twitter last week, saying it will have “little standing or dependability.” He also said that Facebook needs to seek a banking charter if it wanted to launch Libra in the U.S.
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
The government of India has proposed a ban on Libra, which could leave it dead in the water, since India is one of Facebook’s major targets for the cryptocurrency.
While those governments will be able to have a say in tools and services using Libra – including Facebook’s Calibra digital wallet app – Marcus plans to tell lawmakers that the currency itself will be regulated in Switzerland.
“To be clear, the Libra Association expects that it will be licensed, regulated, and subject to supervisory oversight,” Marcus’ testimony reads. “Because the Association is headquartered in Geneva, it will be supervised by the Swiss Financial Markets Supervisory Authority.”
Individual states will have a say in Calibra as a “money transmitter,” Marcus wrote, and the Federal Trade Commission and Consumer Financial Protection Bureau will be in charge of protecting consumer’s data privacy and security.
While this gives us significantly more insight into Facebook’s plan for Libra, there’s still a lot left up in the air. Lawmakers will likely have lots of questions about how this currency will be regulated in the U.S., especially considering Facebook’s questionable history with its users’ privacy.
- Congress already wants to block rollout of Facebook’s cryptocurrency
- Congressional Democrats demand Facebook halt its Libra cryptocurrency rollout
- In SEC filing, Facebook admits Libra cryptocurrency may not happen after all
- The U.S. Senate really doesn’t like Facebook’s Libra cryptocurrency plans
- President Trump attacks Facebook Libra, says it’s not dependable like the dollar