Lawmakers, regulators, economists — just about everyone seems to be lighting a fire under Facebook over the social media giant’s coming Libra cryptocurrency.
As pressure has mounted, stakeholders within and without the cryptoeconomy have speculated at length as to how Facebook would respond.
Now, through its blockchain team lead David Marcus, the company has signaled it is committed to tackling the concerns around Libra resolutely and in good faith. But to do that, Facebook and particularly Marcus will have no shortage of responding to do.
Answers Are Being Demanded in the U.S.
American congressional leaders are seriously turning up the heat on Facebook’s Libra plans.
On July 2nd, Rep. Maxine Waters — Chairwoman of the House Financial Services Committee — was joined by four of her legislator peers in publishing a letter to Facebook’s leadership, in which the representatives demanded the company to pause work on Libra while congressional authorities held hearings on the basketcoin.
Maxine Waters' request for Facebook to put an "immediate moratorium" on the development of its new cryptocurrency, Libra, is gaining steam. Here is the letter sent to Facebook today from a bunch of congressional Democrats: https://t.co/mdlkCOuiCq pic.twitter.com/frZKYw5rHU
— Nathaniel Popper (@nathanielpopper) July 2, 2019
“If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger U.S. and global financial stability,” the letter pointedly read.
The challenge from within the House of Representatives comes after the U.S. Senate’s top banking committee announced last month it was holding hearings on Libra, specifically on the the cryptocurrency’s privacy implications.
Also joining the calls for a Libra moratorium this week was Public Citizen, a U.S. privacy watchdog consortium that released a public letter calling for regulators to block Libra from proceeding “until the profound questions raised by the proposal are addressed.”
Moreover, even American Noble Prize-winning economist Joseph Stiglitz has recently chimed in on Libra, arguing in an op-ed that “[o]nly a fool would trust Facebook with his or her financial wellbeing.”
Global Regulators Also Deeply Eyeing Libra
Leadership at the Financial Conduct Authority (FCA), the United Kingdom’s main financial regulator, have indicated that Libra won’t be allowed to run roughshod in the U.K. before authorities have adequate time to react.
FCA executive director of strategy and competition Christopher Woolard noted at a University of Cambridge conference on July 2nd that the watchdog wasn’t going to simply roll over for a tech company as large as Facebook. Woolard said:
“Historically, this may have been a sector that has lived by the mantra of ‘move fast and break things,’ but the issues raised here require deep thought and detail […] we are facing now issues that could have a fundamental effect on the financial services system.”
In Asia, the Bank of Japan is apparently concerned about Libra, too. That’s per an anonymous source reportedly within the bank, who told Nikkei Asian Review that officials at the institution are worried the cryptocurrency will be a challenge to regulate.
Leadership at the Monetary Authority of Singapore (MAS), Singapore’s top bank, have reportedly expressed their concerns to Facebook over the company’s forthcoming token as well.
Facebook Blockchain Lead David Marcus Responds
Facebook’s blockchain maestro David Marcus has published a preliminary response to the growing body of Libra naysayers, arguing in a Wednesday Facebook note that the stablecoin project would be decentralized and ultimately trustworthy.
David Marcus, the head of Facebook's Libra project, takes to Facebook to respond to all the doubts and questions that have come up since the project was announced two weeks ago. https://t.co/s5FEbaxAMR
— Nathaniel Popper (@nathanielpopper) July 3, 2019
Therein, Marcus wrote:
“Facebook will not control the network, the currency, or the reserve backing it. Facebook will only be one among over a hundred members of the Libra Association by launch. We will not have any special rights or privileges. Facebook created a subsidiary — Calibra — that will operate a wallet service on top of the Libra Network, and while Facebook, Inc. owns and controls Calibra, it won’t see financial data from Calibra.”
Accordingly, the face of the social network’s blockchain efforts said the company was committed to collaborating with international regulators in the coming months to assuage their respective concerns over the cryptocurrency.