Zuckerberg Spins Congress: Back Facebook Cryptocurrency or Let China Win

October 23, 2019 10:07 AM UTC

Mark Zuckerberg will appear before Congress on Wednesday to defend Facebook’s controversial ‘cryptocurrency’ project, Libra.

In his prepared remarks, the Facebook CEO will tell lawmakers that America risks losing “financial leadership” to China if they don’t get behind his company’s plan. Referring to China’s proposed digital currency, which is expected to launch before the end of the year, Zuckerberg will argue:

“While we debate these issues, the rest of the world isn’t waiting. China is moving quickly to launch similar ideas in the coming months… If America doesn’t innovate, our financial leadership is not guaranteed.”

Congress: prefer a digital dollar to Facebook Libra?

Zuckerberg is expected to face heavy pushback against his cryptocurrency plan in Congress today. Lawmakers have been hostile to the idea of a corporate-led currency since Facebook revealed the project earlier this year.

Speaking about Libra on Laura Shin’s Unchained podcast this week, Congressman Patrick McHenry urged his colleagues not to think of Libra as a cryptocurrency at all.

“Look, I think Libra has opened a lot of people’s eyes about the value of cryptocurrency. Libra is not cryptocurrency, however, and we need to stop lumping it together with very real, and very important projects like bitcoin.”

He also said the best way to combat Chinese plans for a digital currency is with a digitized dollar, issued and controlled by the Federal Reserve.

“When it comes to the question of a digitized US dollar, I think that is a reasonable next step for our central bank.”

Mark Zuckerberg will appear before Congress on Wednesday to defend Facebook’s Libra project. Source: MICHAEL REYNOLDS/EPA-EFE/REX/SHU

Zuckerberg admits: “We’re not the ideal messenger”

In his remarks, Zuckerberg will admit that Facebook doesn’t have a perfect track record on privacy or trust.

“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.”

He’ll also distance Libra from the concept of cryptocurrency and pitch it more like a payment system.

In fact, there’s not a single mention of ‘cryptocurrency’, ‘blockchain’ or ‘bitcoin’ in his remarks.

“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.”

But his ultimate goal in today’s Congressional hearing is to scare lawmakers into embracing innovation.

The resounding takeaway from the speech will be: get behind Libra or face losing financial dominance to China.

“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.”

Samburaj Das edited this article for CCN.com. If you see a breach of our Code of Ethics or Rights and Duties of the Editor or find a factual, spelling, or grammar error, please contact us.

Last modified: January 10, 2020 3:16 PM UTC

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Ben Brown @_ben_brown

Ben is a journalist with a decade of experience covering financial markets. Based in London, UK, his writing has appeared in The Huffington Post and he was Chief Editor at Block Explorer, the world's longest-running source of Blockchain data. Reach him at benjamin-brown.uk or on Twitter at _Ben_Brown. Email ben @ benjamin-brown.uk.