Zuckerberg to Congress: Libra is needed but Facebook not 'ideal messenger'

Zuckerberg to Congress: Libra is needed but Facebook not 'ideal messenger'

Mark Zuckerberg says that a global payments system like Libra "needs to get built" and that the US risks ceding financial leadership to China if it does not take the initiative. However, the Facebook CEO admits that his company is "not the ideal messenger right now".

Since publishing a white paper detailing the plans for its Libra cryptocurrency project, Facebook has faced fierce pushback from politicians and regulators, prompting several early backers - including Visa, Mastercard, PayPal and Stripe - to pull out.

In prepared testimony posted ahead of his appearance before the US House of Representatives Committee on Financial Services on Wednesday, Zuckerberg frames the purpose of Libra as a tool to help the billion people around the world locked out of the financial system.

"The financial industry is stagnant and there is no digital financial architecture to support the innovation we need. I believe this problem can be solved, and Libra can help," says the testimony.

"I believe this is something that needs to get built," adds Zukerberg, before conceding, "but I understand we’re not the ideal messenger right now. We’ve faced a lot of issues over the past few years, and I’m sure people wish it was anyone but Facebook putting this idea forward."

With this in mind, the Facebook chief stresses that the Libra Association is an independent coalition of 21 members and "we don't control it". In addition, he says that Facebook will not be part of launching a Libra payments system anywhere until it is approved by US regulators.

While insisting that Libra and Facebook's Libra-related wallet unit, Calibra, will meet all regulatory demands, Zuckerberg says that if America does not lead on digital payments, foreign companies and countries will move in, perhaps without the same level of regulatory oversight.

Specifically, he says, " China is moving quickly to launch similar ideas in the coming months," an allusion to the People's Bank of China's planned digital currency.

"Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership as well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed," warns Zuckerberg.

Comments: (1)

A Finextra member
A Finextra member 23 October, 2019, 13:54Be the first to give this comment the thumbs up 0 likes

Totally agree.  The United States needs to continue to innovate.  Financail Services needs to continue to innovate.  The concept of a stablecoin is exactly what Cryptocurrencies need to be based on.  Not these intriguing crypto inventions built on hot air and speculative gamblers.