Posted 2 years ago | by Ben Armstrong
Since the Facebook has unveiled their Cryptocurrency project, Libra, the U.S. lawmakers have been quick to criticize the project. Other world leaders have also raised questions about Libra.
In the last few weeks, several original Libra members have backed out of the Libra Association.
Those members have included PayPal, Ebay, MasterCard, Visa and Stripe. MasterCard and Visa were sent a letter from U.S. Senators who indicated heavy, regulated scrutiny would come if the two companies proceeded with their Libra Association membership. Both companies stepped back.
In Washington D.C., while U.S. lawmakers have been critical of Libra, Mark Zuckerberg hired additional lobbyists to advocate for Libra.
In his remarks, Zuckerberg says that, "Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership as well as our democratic values and oversight around the world."
Zuckerberg argues that Libra is not meant to be seen as a traditional cryptocurrency, but just a global payments system: "The idea behind Libra is that sending money should be as easy and secure as sending a text message. Libra will be a global payments system, fully backed by a reserve of cash and other highly liquid assets."
This is also Zuckerberg's attempt to create some distances between Libra and Facebook. He says, "Libra Association is independent and we don’t control it, I want to be clear: Facebook will not be part of launching the Libra payments system anywhere in the world until US regulators approve."
It's important to note that his comment makes a distinction between Facebook's involvement with the launch of Libra, not whether or not Libra will launch. Zuckerberg does admit that Libra wants to "get it right" when it comes to follow regulations and launching the Libra Association.
Zuckerberg admits that Facebook has been under considerable government scrutiny. Since Zuckerberg's original Congressional hearing, U.S. lawmakers have been quick to point out Facebook's lack of security and privacy for the over 2.7 billion Facebook users.
"Facebook is committed to strong consumer protections for the financial information we receive, and I want to be clear about how we handle that information. We do not sell people’s data. We do not share information with third parties for lending or credit decisions. Payments processed through Facebook’s licensed payments subsidiaries are subject to comprehensive anti-money laundering, counterterrorist financing, and sanctions monitoring that leverage both our automated systems and human review, and we report suspicious payments activity to applicable authorities consistent with our regulatory obligations. We also have policies in place to prevent fraud."
"there’s the question of whether Libra is intended to replace sovereign currency, and whether it’s appropriate for private companies to be involved in this kind of innovation. I want to be clear: this is not an attempt to create a sovereign currency. Like existing online payment systems, it’s a way for people to transfer money."