For the most part, Mark Zuckerberg has kept his mouth shut about cryptocurrency and Libra. The embattled social media founder, who has found himself in the midst of a number of privacy imbroglios over recent years, has probably found it best not to associate his name with the first form of “corporate money”.
Recently, this changed. In a recent quarterly earnings call, Zuckerberg felt a responsibility to address the elephant in the room, making it clear to shareholders and analysts how exactly Facebook is addressing Libra from a regulatory stance.
The Elephant in the Room
As it stands, Facebook has over 100 individuals working on Libra. While this is only a small portion of the firm’s 40,000 employees, the cryptocurrency project has made an outsized splash, gracing the headlines of every mainstream media outlet and the lips of some of the world’s most powerful people.
As such, it only made sense for Zuckerberg, the chief executive of Facebook, to try and tackle the concerns his shareholders have with the project on Wednesday, when the company held its latest earnings call.
Speaking on the matter, Zuckerberg made it clear that his company will spend “however long it takes” to make sure that the end product abides by the rules and regulations set in place by the world’s economic and political bodies.
He then affirmed that the early launch of the white paper was done in a bid to “address these important questions out in the open”, rather than surprising regulators with a globally-accessible form of money and financial ecosystem. The Facebook chief executive later added:
We are trying to provide a safe and stable and well-regulated product, so that’s always been the strategy and we’ll continue to engage here.
Zuckerberg’s comments abide by the framework set in place by David Marcus, the head of Blockchain and Calibra at Facebook, last week. This, of course, implies that there is an underlying company stance. During the first Congressional hearings about Libra, the former PayPal president also made it clear that they will do everything in their power, including collaborating with regulatory agencies, to “make it work”.
Making it Work
Facebook isn’t taking this approach out of pure altruism. Per previous reports from Blockonomi, a representative of the European Central Bank believes that Facebook and its consortium of 27 partners — which includes Visa, PayPal, Uber, Spotify, Booking Holdings, and other key stakeholders — should not launch Libra.
The board member, Benoit Coeure, explained that for something as important as a new payment system that will be accessible by over two billion individuals in most of the world’s countries, everything needs to be “safe, robust, and resilient from day one”.
Also, Congressional representatives, including Maxine Waters, have claimed that Libra should be blocked from launching until all issues are solved.
A push to collaborate with regulators may not be enough to quell fears, however. During the hearings, Brad Sherman, a Congressman that represents California, made it clear that his peers should not proceed with discussions until Zuckerberg appears in front of the committee. (I’m sure you remember Zuckerberg’s last Congressional hearing.)
Sherman warned that if launched, Libra could be more dangerous to the United States’ security than 9/11, warning of its ability to be used in illicit activities and data gathering.
There has also been some talk of a draft bill that would ban big names in technology from “establishing, maintaining, or operating a digital asset” that is meant to fulfill the three fundamental tenets of money: medium of exchange, unit of account, and store of value.