Various members of the United States Committee on Banking, Housing, and Urban Affairs questioned David Marcus regarding Facebook’s plans with Libra. Mr. Michael Dean Crapo, the Chairman of the committee headed the meeting.
The meeting which was broadcasted live here addressed the concerns of the senators one by one; all senators were given five minutes to question Marcus. Their concerns varied on a variety of topics which not only raised security concerns but also included other questions around the governance of Libra Association.
While the senators were not entirely against the payment module, their doubts were focused around privacy and money laundering to finance illicit activities.
So much so that, Senator Martha McSally began with her questioning with the statement, “I don’t trust Facebook.” Senators were concerned around the alleged use of Facebook’s data in 2016 Presidential elections for which the FTC has fined $5 billion to Facebook.
Furthermore, Senator Smith also questioned the governance model of Libra – “Who is in charge of the Libra Association?”. David Marcus replied by saying that the charter for the governance model and the procedure for nomination of lead representatives is yet to be decided. They intend to seek advice from the members and the regulatory body on the issue.
On the Association’s Accountability
A couple of senators also question Libra on its accountability that the Association will hold in case of fraud, theft, and issues involving cross-country transactions. Senator asked about the responsibility that Libra will hold as creators of a medium for fraud, “Will they act as Criminal Defendant?”
To this, David replied that local constituencies would be set up and it will comply with FinCEN regulations.
Facebook’s Revenue Model with Libra
On questions about Facebook’s monetary policy with Libra, David Marcus said,
Facebook has 90 million businesses that advertise on Facebook. Libra could lead to more commercialization and hence would mean more money for Facebook.
However, Senator McSally suggested that they would sell more of consumer data with Libra and Facebook would continue its unethical practices.
David Marcus welcomed each concern with care. Moreover, he reassured the Senate that the whitepaper was announced before the launch to address the concerns around it. They would be changed and adapted to the requirements accordingly.
Last but not least, he also said,
“We will not move or launch libra on the Facebook platform if required”
He reiterated the fact the Libra is an independent organization with its own set of rules and that it would provide for regulatory inclusion and interoperability.
Bitcoin Price Analysis
The meeting concluded with a profound disregard for Facebook and questions around its activities. The senators were not evidently not convinced at the moment. However, they expect Facebook and the Libra Association to work along with the Senate in making the innovative idea a success.
Nevertheless, the extreme grilling, negative concerns, and the eventual delay have affected Bitcoin prices negatively. Bitcoin [BTC] dropped below $10,000 as the proceedings concluded. The price of Bitcoin at 14: 30 hours UTC on 16th July 2019 is $9980.
Do you think David will get a positive response from the Financial Services Hearing tomorrow? Please share your views with us.
Nivesh from Engineering Background is a full-time Crypto Journalist at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com