David Marcus, Facebook’s side of the official hearing and man responsible for Calibra project development, has been confronted with the US lawmakers since Tuesday. On behalf of his company, Marcus answered a compensative hearing and questions about future Libra’s plans. Facebook made a quite exciting atmosphere, both in the financial world of the US and Europe, and his responsibility is now to give some answer and make everybody calm down. On Wednesday, a hearing was held in front of the House Financial Services Committee of the US Senate. We could hear the voice of legislators and firm conviction that Facebook’s plan to develop a cryptocurrency and joining the world of global finance could endanger sovereign currencies or even destabilize governments. As was the case the previous day of the hearing, Mr. Marcus was persistent in persuasive despite the controversial reputation that faces Facebook recently, that there is no room for skepticism about the legal use of Libra.
“Facebook plans cause serious concern in terms of privacy, trade and monetary policy”
A California Democrat representative, Brad Sherman, characterized the hearing and resolution of a problem related to the development of Facebook’s cryptocurrency for the decision of the decade, and, as he explained, “God’s gift to drug dealers and tax evaders.”
His colleague from the Pennsylvania party, Madeleine Dean, believes legislation should first look back on past mistakes, and then deals with Libra’s solution.
Hearing in front of the US Senate is not the only urgency related to the new Libra project; It also faces the concerns of regulators around the world. At the time of the hearing on Wednesday, International Monetary Fund chief economist Gita Gopinath issued a press statement stating that due to the possible increase in the influence of the dollar in the global economy due to Libra, which would ease money laundering, globally.
While on Tuesday in the Senate’s Libra hearing centered on widespread distrust of Facebook, members of the House Committee have shown greater interest in many practical barriers that are likely to face Facebook if they want to continue their plans.
Their plans are seriously concerned with privacy, trade and monetary policy, according to Makina Vaters, a spokeswoman for California. The system will “bring enormous economic power that could destabilize the government.”
The Republican Party of the Senate did not show the same interest in the future of this cryptocurrency. Yet, they did not miss several very pragmatic questions for David Marcus; for example – can Facebook stop people from using the Libra in a way that closed accounts of controversial political figures like the conservative commentator Milo Iiannopoulos? Marcus answered, ‘We don’t know.’
Next question during the hearing: How much Libra can affect the financial system in America if the Association registered in Switzerland manages it?
David Marcus had a more conciliatory tone on the second day of the hearing and added that Facebook confesses its mistakes and seeks to eliminate them in the future, emphasizing the underlying uncertainties that still face the currency.
Libra is designed and managed by the Association of large corporate partners, registered as a nonprofit organization in Switzerland. It should reduce Facebook’s power over the currency. However, on Wednesday, it raised questions on how much the US regulators would have the ability to control the system registered outside the United States.
Several different traditional currencies will support Libra, held in bank accounts. Members of the House Committee have expressed concern that this could expose consumers to the risks of currency fluctuations and could reduce the strength of the dollar.Libra is not aimed at competing the traditional currency or Federal Reserve
In the course of the hearing, Marcus stated that Libra is not ready to compete with the dollar or any other fiat currency. “We want Libra to be a digital, global currency and to be one unit of digital currency for the whole world.”
Recall, in June, Facebook published the Libra project, clearly showing affinities for joining the global financial system. If Libra invokes, it will lead the cryptocurrencies directly into the hands of more than two billion Facebook users. Even before the company announced its intention to enter the financial system, the company struggled with concern that it became too strong.