Sep 12, 2020
Mark Zuckerberg, founder and CEO of Facebook, finally addressed the Congress, but it turned out to be a nightmare for the proponents of Libra.
He admitted to the lawmakers that Facebook will pull out of the 21-member consortium if the Libra Association decides to launch the digital currency without receiving the US regulators’ approval.
After facing many tough questions on Wednesday on the digital currency project and Facebook’s intention of curbing illegal activities with it, Zuckerberg admitted that the Libra Association, not Facebook, will always have the final say on anything related to Libra.
Amid Zuckerberg’s stress on receiving approval from US regulators, Rep. Bill Huizenga (R-Mich.) asked: “You said that you won’t launch without U.S. regulator approval. What happens if the association decides to launch despite that?”
“I believe we would be forced to leave the association,” Facebook’s CEO replied. “If I feel like Facebook can’t be a part of it, then Facebook won’t be a part of it.”
Though the answer was hypothetical, this raises many questions on the project and the mandatory role of Facebook in launching Libra.
Seven original members of the association including PayPal, Visa, Mastercard, and Stripe cut ties with Libra earlier this month amid concerns over negative regulatory scrutiny.
Libra Association was officially formed on October 14, however, none of the members signed any binding agreement to be a part of the consortium. Yesterday, BBC also revealed that the original members are yet to make any monetary commitment for the project and the topic was not even raised in the first general meeting.
While replying to the question of receiving $10 million from the Libra Association members, Zuckerberg said he was unaware of any such financial transactions.
The lawmakers also raised concerns about the usage of Libra for illegal activities. Upon asking the question about the anonymity of Calibra wallet transactions, Zuckerberg said: “We see a range of cryptocurrencies. We are trying to build a safe and secure and regulated alternative. As a big company, we’re not going to do something that’s unregulated or decentralized. We want to get to the same standard on money laundering or CFT [counter-terrorism financing].”