The United States Senate Banking Committee has released the opening statements of David Marcus, head of Facebook’s crypto wallet Calibra today, July 15. The statements come ahead of a hearing on the Libra cryptocurrency project tomorrow in the Senate, in which Marcus will testify.
In
his testimony, Marcus raised the issue of Facebook’s upcoming
stablecoin Libra and its associated digital wallet Calibra, which have
previously drawn criticism
from both community members, lawmakers and leading industry players.
Specifically, Marcus delivered comments on the structure and management
of Libra and Calibra and their implications for commerce and consumers.
Marcus
writes that no sole organization should be responsible for the Libra
Blockchain and the Libra Reserve; instead, there should be a cooperative
approach. Thus, Facebook is ostensibly working on the creation of the
Libra Association, which is an independent membership-based
organization. Once Libra is launched, Facebook’s role in governing the
association will ostensibly be equal to that of other members.
According
to Marcus, Facebook will not launch Libra until the company satisfies
all matters related to the stablecoin’s regulation and receives
appropriate approvals. Marcus continued:
“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. Calibra has filed for state money transmitter licenses
in the U.S. and it is also registered with FinCEN as a money services
business.”
Marcus further stated that Libra is a payment
tool, and not an investment, which means that users will not be able to
buy or hold it like a stock to subsequently gain interest on it. Per
Marcus, Libra also differs from other currency-backed stablecoins as it
will not have its value fixed to any single asset, specifying:
“Libra
will be fully backed on a one-to-one basis through the Libra Reserve,
which will hold a basket of currencies in safe assets such as cash bank
deposits and highly liquid, short-term government securities. These
currencies will include the U.S. dollar, the British pound, the euro,
and the Japanese yen.”
Yesterday, a drafted bill entitled “Keep Big Tech out of Finance” surfaced
online, allegedly originating from within the U.S. House of
Representatives Financial Services Committee. The bill read, “A large
platform utility may not establish, maintain, or operate a digital asset
that is intended to be widely used as medium of exchange, unit of
account, store of value, or any other similar function, as defined by
the Board of Governors of the Federal Reserve System.”
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