Facebook is bending over backward to appease lawmakers in the wake of the backlash it has received for its digital currency Libra and digital wallet Calibra. David Marcus, who is at the helm of Calibra and who previously helped to run messaging products at Facebook, has published his testimony ahead of a Senate hearing scheduled for July 16. In the testimony, Marcus did all but admit that lawmakers are running the Libra circus, saying in prepared testimony :
“We know we need to take the time to get this right. And I want to be clear: Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals.”
That could be a while given the resistance to big tech’s pursuit of financial services and could derail Facebook’s plans for Libra’s 2020 debut.
The responses to Marcus’ testimony on social media have underscored the distance that many in the decentralized crypto community seek to put between themselves and Libra. One follower stated:
“David Marcus will be the next Federal Reserve Chair.”
In fact, Marcus mentions Jerome Powell in his own testimony, saying Facebook “strongly agrees” with the Fed chair’s belief that ” Libra needs to be patient and thorough, rather than a sprint to implementation.”
Not only that but Libra, which will be backed by the USD, GBP, EUR, and JPY, would be subject to the monetary policies of the jurisdictions in which it is used. Marcus goes so far as to suggest that Libra would be “controlled” by local governments. If Libra had any trace of decentralization before – and that’s a big “if” – clearly it’s disappeared by now.
Another social media user suggested that Facebook is blind to think that their Libra coin would even be used at all.
Meanwhile, Marcus is quick to point out the more than two-dozen other companies that have partnered with Facebook for the Libra consortium. This is clearly a strategy to shift the focus from being squarely on Facebook to spreading it across a group of companies in corporate America. While this may be a good try, it’s likely to fall flat given that the Libra coin has already become synonymous with Mark Zuckerberg and Facebook, their privacy shortcomings and all.
If Libra is ever going to see the light of day, it’s going to have to make its way past policymakers, and that is looking more and more like a stretch every day. Even President Trump isn’t a fan and was probably motivated to comment on bitcoin because of Libra.
It’s not that crypto companies can’t operate in a regulatory compliant manner with AML and KYC procedures. But Libra is taking it to a whole new level.
The ironic part is that trying to appease lawmakers is likely to be a one-two punch for Facebook. They are distancing themselves further from the crypto community, and lawmakers aren’t likely to change their mind on big tech and finance in this lifetime. So it’s likely to be a lose-lose situation for them while crypto stands to gain as bitcoin is thrust into the spotlight.