New statements were made in defense of Libra’s efficacy and safety as a global stablecoin that is alleged to threaten national security policy. The statements were made at the Money 20/20 event held in Las Vegas by David Marcus, head of Calibra, which is Facebook’s digital wallet.
The headline of Marcus’s talk was in response to a report released by G7 nations at the start of this month which stated that projects such as Facebook’s Libra project should not go ahead until their risks they pose can be accounted for. In the report, the G7 working group made their stance obliquely clear to Libra’s founders:
“The G7 believes that no global stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are addressed.”
At the time, Libra heads prepared a response that said it would work within established regulatory frameworks.
“Libra is being designed to work with existing regulatory institutions and apply the protections they provide to the digital world – not disrupt, or undermine them.”
Facebook’s Libra team has again come in defense of their cryptocurrency project stating that it does not pose the risks raised by the G7. More broadly, Marcus stated that Libra has the potential to refactor human society, stating that Libra could “change the direction of the world.” He stated:
“the most meaningful innovations that have changed the lives of millions across the world in a profound way have always been met with damning headlines.”
In response to the concerns of money creation — which was identified as a threat to monetary policy by the G7 group — Marcus clarified Libra’s intentions, stating that money creation was not part of Libra’s design.
“With Libra, there is no money creation; we have a full one to one back reserve, there is no money creation whatsoever,” said Marcus.
Marcus also clarified that Libra would comply with KYC and AML laws to ensure that it was not facilitating illegal activities, and noted that the adoption of the proposed cryptocurrency would take time.
“We also designed Libra in such a way so that any wallet can participate as long as KYC and AML requirements are met. It was designed to be competitive, but we still need to earn people’s trust over time to use Calibra.”
On the other hand, Marcus also made a point of highlighting the blockchain’s strengths in tracing illicit payments on the Libra network while also promoting its robustness.
“AML is something we need to address, and I want to say that the efficacy of sanction enforcing can be much higher on Libra than other payments networks. Digital to digital is more traceable than when cash is involved and will be more secure as it will run on real-time systems.
“The open ledger – the blockchain – enables regulators to look at what is happening themselves and identify where the risk is without relying on reports. The onus is on us to do that work and now that we have the governance structure in place, we can now demonstrate this improvement”.
Marcus clarifies that there is a “data separation between Facebook and Libra” and data will not be used for ad targeting but will bring distribution. “Moving money around the world with
WhatsApp and Messenger is what will bring real value on a day to day basis.”