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Facebook’s Coin Provokes Outrage in Senate
Since Facebook announced that it will issue coins, it has caused a huge sensation. For the currency circle, the release of Libra is undoubtedly a huge support for the development of encrypted digital currency. Libra can bring huge traffic to both the chain circle and the currency circle. And more people's support and recognition.
But success is also Xiao He defeat Xiao He, Facebook's huge traffic and influence are the most favorable factors for Libra, and it may also bring devastating damage to Libra.
On June 17, Facebook released the Libra (digital currency) white paper, and Libra has been questioned and criticized.
Trump also tweeted three consecutive tweets questioning Libra. He believes that the Libra project is difficult to gain a foothold and has little reliability. If Facebook and other companies want to become banks, they must obtain new banking licenses and Subject to bank regulations. Federal Reserve Chairman Rom Powe also believes that Libra has raised concerns from the outside world, including privacy, money laundering, consumer protection, and financial stability.
More than that, similar concerns have spread to global regulators other than the United States.
Facebook's more than 2 billion users raise serious privacy, transactional, national security, and monetary policy concerns, as well as serious threats to investors, consumers, and the broader global economy.
On July 3, the U.S. House of Representatives Financial Services Committee sent a letter to Facebook executives, demanding that all work on Libra be stopped immediately, saying that Libra would fuel a new Swiss-centered global financial system and challenge U.S. monetary policy and the status of the U.S. dollar.
And Facebook seems to be very well prepared to respond to congressional inquiries. A Facebook spokesperson told TheVerge, an American technology media, "We look forward to working with lawmakers in the process of launching Libra, including in the upcoming Libra. Answer their questions before the House Financial Services Committee."
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Marcus and the Senate face off in their first encounter
At 10 am on July 16, US time, the first Senate hearing on Facebook Libra was officially held. David Marcus, head of the Libra project, represented Facebook at the controversial hearing.
During the two-hour hearing, Marcus and lawmakers went back and forth, with Senate lawmakers and regulator officials asking a series of tough, realistic questions and, at times, pointed criticisms of Marcus's answers. question.
David Marcus, head of Facebook Calibra, said at the hearing that the Libra Association will only integrate the Calibra cryptocurrency wallet into Facebook Messenger and Whatsapp, and no other wallets will be embedded. And said: "If all my salary is paid with Libra, I will be happy to accept it."
As for the congressman's proposal to let Facebook stop the research and development of the Libra project. Marcus believes: "If our country does not act, we will soon see the advent of digital currencies controlled by other countries, but those digital currencies are completely different from our values.
The following is the main content of Marcus's first hearing:
1. Regarding the question of why the Libra Association is headquartered in Switzerland, he said that it is not that Libra is evading any responsibility for negligence, but because the Bank for International Settlements is in Switzerland, and Calibra will be supervised by the Financial Crimes Enforcement Department of the US Department of the Treasury.
2. Libra will be built on US regulations, will not do anything other than compliance, and will not start until the concerns of US lawmakers are answered.
3. Facebook is only one of the 28 existing (eventually there may be 100) members of the Libra Association, and it has no privileges. Facebook's trust issues do not represent Libra's trust issues.
4. Calibra will attach great importance to user privacy and will never directly sell or use user data for profit. However, if other financial institutions cooperate to provide additional financial services, they will ask for consent to use their data specifically for this purpose.
5. Facebook's core revenue model around Libra is the main revenue that online business companies spend on Facebook ads.
And the data about the transactions with Calibra on Facebook? How much has Facebook invested in Libra development? Will the Libra Association freeze assets if a terrorist organization is found to be using Libra? Marcus did not give a positive answer to such questions, causing the Senate to question Libra even more. Affected by this, Bitcoin began to fall, falling by more than 10% in 24 hours. As a result, the cryptocurrency market fell sharply, and the market was red across the board.
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Marcus and Senate Second Showdown
The second duel of the Libra U.S. hearing, a 5-hour wheel battle, from the evening of July 17th to the early morning of the 18th, Beijing time, the U.S. House of Representatives held the second Libra hearing, and David Marcus, head of the Facebook Calibra team, appeared again Hearing and questioning.
The opening statement of Patrick McHenry, vice chairman of the U.S. House of Representatives Financial Services Committee, became a highlight of the meeting. He said: "Washington must avoid becoming a place that stifles innovation. .In fact, today is not Facebook, change has come, blockchain technology is real, and Facebook's entry into this new world is just a confirmation of this fact. Satoshi Nakamoto's Bitcoin is an unstoppable force, and we This kind of innovation shouldn't be stopped, and the government can't stop it."
In the next 5 hours of round-the-clock battles, David Marcus will discuss how to cooperate with regulators, how Libra can control its use in sanctioned countries, how Libra can solve the problem that third world countries do not allow consumers to access foreign currencies, and how Libra involves He gave correct and detailed answers to questions such as holding user funds and whether they belong to banking services.
And Marcus also said that Libra will compete with WeChat and Alipay, and Bitcoin will bottom out. The following is a summary of David Marcus's second round of testimony:
Third-party Libra wallets may not be able to integrate into WhatsApp and Facebook Messenger; Libra will compete with Alipay and WeChat Pay; Libra is not a security and ETF, Facebook hopes it is a payment tool; Libra will not compete with sovereign currencies; There are other networks emerging; Libra is working with G7, Switzerland to solve regulatory trust issues; for many countries, Libra will become a high-quality digital currency; Libra will cooperate with regulators, prioritize privacy and consumer protection, and combat money laundering , terrorist financing and other activities; did not promise to stop the development of Libra; when necessary, Libra wallet Calibra will cooperate with banks.
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So what impact will the positive or negative effects of Libra have on the currency circle?
The positive and negative effects of Libra will bring to the currency circle
If Facebook can successfully launch Libra, it will be a huge benefit to the digital currency and blockchain industry. Now the number of users who know or have used digital currency worldwide is about 30-50 million, while Facebook has 2.7 billion Huge flow of users.
The launch of Libra by Facebook will greatly promote the understanding of digital currency and blockchain for more users outside the blockchain. It can help mainstream people, the government, and the media learn more about the industry and view the industry more positively. Facebook's future launch of the Calibra wallet will also greatly promote its development, which is a win-win thing.
But once Libra fails, it cannot be issued. It will bring a large shock to the currency price, and the blockchain will lose an opportunity for the whole world to understand and use it.
At present, we are not sure about the fate of Libra, but what is certain is that there will be many obstacles on the road of Libra, and the pressure of risk control and subsequent regulatory resistance facing Libra will only become heavier. And we will continue to pay attention to the future of Facebook and Libra.
