Zuckerberg at the US Congress: Libra is not a threat

Today is the big day: Mark Zuckerberg is expected at the US Congress to testify about the Libra project. The hearing is scheduled for 10:00 AM US time (GMT-4, 4:00 PM (CEST) at the House Committee on Financial Services. 

In the meantime, the text containing the statements that the CEO of Facebook is preparing to make was released yesterday. A full-scale defence of the Libra stablecoin, not a threat but an opportunity. This is the summary of the seven pages released by the official US bodies. 

Zuckerberg at the US Congress: Libra for financial inclusion

“There are more than a billion people around the world who don’t have access to a bank account, but could through mobile phones if the right system existed. This includes 14 million people here in the US. Being shut out of the financial system has real consequences for people’s lives (…) 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”.

So it begins. In his testimony, Zuckerberg reiterates that Libra was created to make sending money as easy and safe as sending a text message. 

The CEO of Facebook doesn’t deny the many problems that his social network has faced in recent years and which have undermined the trust placed in the web giant. 

“There are questions about financial stability, fighting terrorism, and more. I’m here today to discuss those risks and how we plan to address them. But I also hope we can talk about the risks of not innovating.”

Zuckerberg continues. Saying he is ready to talk to regulators, experts and governments, adding:

“What we’re discussing today is too important for any single company to do on its own.”

Zuckerberg: Libra’s launch might be postponed

In detail, Zuckerberg describes the objective of the Libra project: to promote financial inclusion with a secure, efficient, low-cost way of sending and receiving payments.

With regard to the concerns raised, the answer is clear:

“First, we’ve heard that people are concerned that we are moving too fast. As we have said from the beginning, we’re committed to taking the time to get this right. We co-wrote a white paper to begin a dialogue with experts and the regulators and policymakers who oversee the stability and security of our financial systems. It was never intended to be the final word on the project. The goal was to signal the direction we want to go and to start a conversation about how to get there. That conversation is ongoing, and we will continue to advocate for responsible innovation in this space”.

And again:

“Second, some have suggested that we intend to circumvent regulators and regulations. We want to be clear: Facebook will not be a part of launching the Libra payments system anywhere in the world unless all US regulators approve it. And we support Libra delaying its launch until it has fully addressed US regulatory concerns”.

The testimony reaffirms the distance and independence between Facebook, Libra and Calibra, and the fact that user data is secure.

Libra is not a threat to monetary sovereignty

Finally, Zuckerberg focuses on what is one of Libra’s most heartfelt threats:

“There’s the question of whether Libra is intended to replace sovereign currency, and whether it’s appropriate for private companies to be involved in this kind of innovation. I want to be clear: this is not an attempt to create a sovereign currency. Like existing online payment systems, it’s a way for people to transfer money. Monetary policy is the province of central banks, not Libra”.

Finally, he concludes:

“I know we have a lot to do, but I also know that the problem of financial under-inclusion is solvable, and I believe that we can play a role in helping to find the solution. I hope that today I can answer some of your questions”.

All that remains is to wait for the hearing to take place and for the response of the members of the committee, starting with the chairman, Maxine Waters.