It’s been just around three weeks since Facebook and its countless corporate partners unveiled Libra, its cryptocurrency project and first real foray into the blockchain world. Despite its youth, the budding venture has already stumbled into some survivability concerns, with regulators already seeking to suppress the development of Libra.
After keeping its mouth shut on the matter for a number of weeks, Facebook has come out to reassure global governments. In an extensive Facebook post and letter to U.S. Congressmen and Congresswomen, the Silicon Valley darling’s head of Blockchain tried to diffuse rumors and concerns.
Facebook Gone Rogue?
When Libra was unveiled last month, many in the world of traditional finance thought Facebook was going rogue. In launching the project, many suggested that Facebook and its corporate partners, which includes Booking Holdings, Uber, Spotify, Coinbase, PayPal, Visa, and so on, were effectively starting their own nation with its own currency. And with Facebook touting over two billion monthly active users, it will be one powerful nation indeed.
This revelation rightly led to some fears materializing in the United States. Most notably, Maxine Waters, a Democrat House Representative of California, came out to denounce Facebook both in a letter and in an interview with CNBC. Waters remarked that she was fearful that Facebook would use this project to procure even more data than it already has. Indeed, as Phil Chen, the head of HTC’s EXODUS division, explained, with Libra, Facebook will get even “more direct access to your financial information [than before],” adding that, “It’s not just access to the information of your transactions, it’s direct access to your wealth and capital.”
No, Far From
David Marcus, the vice president of Blockchain at Facebook, says that this won’t be the case. Mark Zuckerberg, too, has told public audiences that Libra isn’t what its cynics suggest it is, especially from a privacy and data front. In the aforementioned letter, which The Hill managed to obtain, Marcus wrote that he gives her his “personal assurance” that everything will be done right and that all questions will be properly answered.
Marcus’ comment comes after Maxine and other members of the House Financial Services Committee called for a moratorium on Libra, citing Facebook’s countless privacy imbroglios and the risk of financial hacking that will come with the cryptocurrency. The moratorium request read:
[Facebook should] cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action. [If a moratorium is not put in place, Libra] risks a new Swiss-based financial system that is too big to fail.
He goes on to state that Facebook and the Libra Association values and “needs” the feedback of “governments, central banks, regulators, non-profits, and other stakeholders at the table”. To back this point, Marcus explained that if Facebook wanted to get ahead of regulators, it wouldn’t have announced Libra this early, over six months ahead of the planned release date. He goes on to state that Libra’s premise is not to benefit, but society at large, claiming that this new cryptocurrency and ecosystem of finance will promote inclusion and economic benefits that are not exactly possible with Wall Street and its bureaucracy.
In an accompanying Facebook post, the former PayPal president noted that the bottom line is that “you won’t have to trust Facebook to get the benefit of Libra”. He went on to accentuate that Facebook will have any benefits as a node of the network, and will instead only be one of the multiple moving parts in Libra:
“We’ve been clear about our approach to financial data separation and we will live up to our commitments and work hard to deliver real utility.”