Takeaways From Libra Congress Hearing
This morning, David Marcus, co-creator of Libra and Calibra leader, sat in front of US Congress to answer questions on the future plans of the Libra Association. Overall, if you have been following this story (if not check out my article summarizing Libra’s key points) the past month the concerns that were raised were expected.
- Majority of senators praised David Marcus and Facebook for taking on this initiative and expressed the need for innovation and helping the unbanked. In my opinion they went very easy on him with the exception of a few senators. The questions that were more aggressive and direct were centred around the topics from the previous hearings with Mark Zuckerberg and the ability for us to trust Facebook. It seemed as though the committee did a bit more research to learn about Libra and the technology and/or held back a bit to avoid looking as incompetent as some of the video clips circulating on social media made them look from the last hearing with Zuckerberg.
- The issues that were raised around Libra and Calibra were no surprise. The committee was concerned about privacy, money laundering, security, and regulation in the United States. One of the key points that David Marcus had to continuously clarify was the fact that the Libra Association is not run by Facebook. They’re 1 of 100 co-founders that are all working together on this project. The Calibra wallet, which is separate, is what is run by Facebook but will have to compete with many other digital wallets to win the trust of the users.
- The main takeaway for me from this hearing was the allegiance that Libra has to the United States. Mr. Marcus was asked point blank if the United States was their primary focus in terms of regulation, in which he replied that it was. He also went on to say that they would not launch until all regulations are met and the United States congress, regulators etc approved the Libra system put in place. Libra Association has no intention to compete with nation currencies as Marcus quotes “The Libra Association … has no intention of competing with any sovereign currencies or entering the monetary policy arena”.
The hearing went somewhat as expected, although I did not expect the committee to be as supportive as they were as a whole. One thing that really stuck out to me was as David Marcus was answering a question about how the technology will work he said,
If we don’t do it, someone else will.
To me, that sounds a lot like, if the United States doesn’t act now then another nation will and Facebook is willing to do this on behalf of the USA. It is no secret that 90% of the companies in the Libra Association currently are United States based. This really makes me question if Libra is truly good globally or if this is the United States way of maintaining control of a world that is quickly moving into a new era.
I truly hope that Libra and Calibra are faced with tremendous competition outside of the United States to keep everyone on their toes and doing what is best for the users.
All in all, these types of hearings, need to control, and questions from people that tend to be stuck in an old system showcase why Bitcoin is king.
However, BTC price didn’t act well after the hearing breaking below $10,000 for the second time in July. A good buy zone maybe? 🙂