David Marcus, CEO of Facebook’s crypto wallet Calibra, underlined that Facebook would not launch the Libra cryptocurrency project before they address all regulatory concerns. Marcus delivered his comments at a hearing on Libra with the Financial Services Committee of the United States House of Representatives today, July 17, as reported by a Cointelegraph correspondent.
On the second day of hearings on Libra’s structure and management, Rep. Nydia Velazquez asked Marcus, “Will you commit yourself to not launch before all the concerns from the Federal Reserve and other regulators are addressed?” In response, Marcus said, “Absolutely.” Rep. David Scott followed up with a comment:
“Neither your white paper nor your subsequent Facebook post offered any concrete details as to how you plan to implement or enforce strong AML [anti-money laundering], how you plan to enforce KYC [Know Your Customer], and most important, to ensure the safety — and that’s what all of us are concerned with — of our financial system.”
Rep. Scott asked Marcus how the company envisions Libra’s responsibility to combat money laundering to protect the financial system. Marcus said that “blockchain gives additional information to law enforcement and regulators compared to our current system.”
Marcus also stated that he believes that they can improve the current system in order to preclude wrongdoers from using Libra for illicit activity.
Rep. Jim A. Himes noted that “users will have the profoundly unfamiliar experience of assuming foreign currency risk” and asked Marcus how the company is going to make foreign currency risk transparent. Marcus responded that Facebook will have educational tools built into the product.
As reported earlier today, committee chair Rep. Maxine Waters opened the hearing with an indictment of Facebook’s past behavior. In her statement, Waters noted a “demonstrated pattern of failing to keep consumer data private on a scale similar to Equifax.”
Waters also stated that Facebook, “allowed malicious Russian state actors to purchase and target ads,” which purportedly influenced the 2016 U.S. presidential elections.
On July 15, a day before the hearing, the Banking Committee released Marcus’ opening statements, where he stressed Libra and Calibra’s implications for commerce and consumers. “State financial regulators will regulate Calibra as a money transmitter, and the Federal Trade Commission and the Consumer Financial Protection Bureau will monitor for consumer protection and data privacy and security issues.”