“I actually don’t know if Libra is going to work, but I believe it’s important to try new things and innovate,” said Facebook (FB) chief executive Mark ‘Zuckerbuck' while he was grilled by lawmakers over the company's plan to launch a digital currency before a Congressional panel on Wednesday.
Zuckerberg explained that the idea behind its cryptocurrency project Libra is to make sending money as easy as sending a text message and helping the unbanked that includes 14 million US citizens.
Democratic Congressman Brad Sherman of California however, tore into Zuckerberg for his claims of helping poor and unbanked people when “You’ve done no effort to help the unbanked anywhere else and any other time.” Sherman said Facebook is only trying to help the drug dealers and tax evaders.
With the financial industry stagnant, Libra, Zuckerberg believes can solve the problems that the current system is failing.
“Libra will be a global payments system, fully backed by a reserve of cash and other highly liquid assets.”
We Might not be Right, but we’ll Get it Right
However, he also acknowledges that the social media giant is “not the ideal messenger,” Facebook being involved in misusing its customers’ data.
“I’m sure people wish it was anyone but Facebook putting this idea forward,” said Zuckerberg. But the company is apparently serious about “putting power in people’s hands.”
Zuckerberg also addressed the concerns by people that it is moving too fast and that they intend to circumvent regulators and regulations. But the CEO said the company is “committed to taking the time to get this right,” and that payments processed will be subject to comprehensive anti-money laundering and counter-terrorist financing.
In fact, Libra is an opportunity to strengthen the fight against such financial crimes as a lot of illicit activities are funded through cash, Zuckerberg said.
Libra Launches only with Regulatory Approval
“We support Libra delaying its launch until it has fully addressed US regulatory concerns,” said Zuckerberg adding that they will seek approval from all the regulators who has jurisdiction over this.
On the question, what would happen if the Libra Association decides to launch despite the US regulatory approval by Rep. Bill Huizenga (R-Mich.), Zuckerberg replied, “I believe we would be forced to leave the association”.
Think about financial leadership America
Republican congressman Ted Budd of North Carolina noted that Libra is not a cryptocurrency but a stablecoin, so how Zuckerberg plans for the regulation of the currency?
“If we’re to remain a world leader in financial technology, it’s vital that we don’t embrace reactionary laws against cryptocurrencies,”
Zuckerbuck also pushed forward the idea that its dollar-backed stablecoin will “extend America’s financial leadership as well as our democratic values and oversight around the world.”
China, he pointed out is already “moving quickly” to launch its very central bank digital currency in the coming months and if America doesn’t innovate, its “financial leadership is not guaranteed,” added Zuckerberg.
The Libra Association also has “no intention of competing with any sovereign currencies or entering the monetary policy arena,” Zuckerberg cleared.
You can watch the entire hearing here.