Editor's Note: This article comes fromDeep Chain Finance (ID: deepchainvip)Editor's Note: This article comes from
Deep Chain Finance (ID: deepchainvip)
Deep Chain Finance (ID: deepchainvip)
On Wednesday local time in the United States, Facebook CEO Zuckerberg is about to testify on Libra to the House of Representatives Financial Services Committee. Today, his hearing testimony was disclosed.
In the testimony, Zuckerberg discussed Libra's vision, compliance issues and relationship with Facebook. It can be seen that Zuckerberg used some persuasive techniques in the testimony, such as playing the Sino-US relationship card to create confrontation.
Regarding Zuckerberg’s testimony, Deep Chain Finance also specially invited Dr. Long Baitao, an academic assistant to economist Zhu Jiaming, one of the authors of China’s first Libra monograph, financial commentator, and director of the Financial Technology Research Institute of Renmin University of China. Cai Kailong, a senior researcher, Gu Yanxi, the founder and dean of the CBX Research Institute, Liu Changyong, the founder of Zhimi University, and many other industry insiders who have continued to pay attention to and research on Libra conducted analysis, and also sorted out relevant comments from US congressmen. I hope to take you to analyze and see through the "secret" behind Zuckerberg's testimony, and see the future development of Libra.
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"Zuckerberg Testimonial Essentials"
1. The idea behind Libra is that sending money should be as easy and secure as sending a text message.
Libra will be a global payment system backed by substantial cash reserves and other highly liquid assets. I believe this is something that needs to be built, but I know we are not ideal messengers right now. We've faced so many problems over the past few years that I'm sure one wishes that anyone else would have come up with this idea but Facebook.
2. If America does not innovate, our financial leadership cannot be guaranteed.
While we discuss these issues, the rest of the world is not waiting. China is moving quickly to roll out similar ideas in the coming months. Libra will be primarily backed by the U.S. dollar, which I believe will amplify U.S. financial leadership, as well as our democratic values and global regulation. If America does not innovate, our financial leadership cannot be guaranteed.
3. Some believe that we intend to bypass regulators and regulations.
We want to be clear: Facebook will not participate in the Libra payment system and allow it to launch anywhere in the world unless all U.S. regulators approve it. We support Libra delaying its launch until it fully resolves U.S. regulatory issues.
4. We set up Calibra as a regulated subsidiary so that there is a clear distinction between Facebook's social data and Calibra's financial data.
5. Is Libra intended to replace sovereign currencies, and should private companies participate in this innovation?
I want to be clear: this is not an attempt to create a sovereign currency. Like existing online payment systems, this is a way for people to transfer money.
Libra is not intended to compete with any sovereign currency or enter the monetary policy arena. It will work with the Federal Reserve and other central banks responsible for monetary policy to ensure this. We expect the Libra Association's regulatory framework will ensure that the Association does not interfere with monetary policy.
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"Big Brothers sharply comment on Zuckerberg's testimony"
1. Cai Kailong: Zuckerberg’s example of China’s digital currency is a bit far-fetched
The full text of this testimony was largely within my expectations. Three points were expected, and one point was unexpected.
Both Facebook and Zuckerberg emphasized that Libra is a payment function and a part of inclusive finance, which makes payment costs lower and allows more people to enjoy financial payments. This is also one of their grand visions. I believe that emphasizing the Libra vision again can help them pass the test smoothly, because their vision is really in line with the mainstream society and the common views of everyone in the world. It is also the reason why so many people support Facebook.
It is also expected that Facebook should cut its relationship with Libra, because if everyone thinks that Facebook owns Libra, or that Libra and Facebook are strongly bound, there will be many regulatory issues. In particular, the U.S. Congress is very worried about Facebook's personal privacy leaks and financial monopoly, because they don't want Facebook, a giant company with a population of 2.7 billion in the world, to be a financial giant.
Therefore, Xiao Zha smartly stated in his testimony that Facebook may not be the best leader, and also emphasized Calibra, one of their subsidiaries is a member of Libra, and the future will be dominated by the Libra Alliance. In a public event four or five days ago, Xiao Zha didn’t talk about Libra at all, so now he has gradually cut it, which is a good thing for both Facebook and the Libra Alliance.
The third point is expected to emphasize compliance, which is the biggest problem they face now.
Technology, application scenarios, and users are not problems. The biggest problem is compliance, so he uttered harsh words in his testimony, that is to say, he will never replace the position of legal currency, and then emphasized again, and it is the first time, very Officially, Facebook will not join the Libra Alliance without the consent of U.S. regulators.
Be very careful with his wording, Facebook won't join, not that Libra won't do it. So he still left a way out, maybe the regulators disagree, Libra is forced to launch, then Facebook will withdraw from the Libra alliance, but he didn’t say that Libra will not be launched, that is the difference, if the regulators don’t agree, Facebook will not participate.
The suggestion I gave before is that Libra can be tried in other countries first. Before the US regulation has agreed, in a regulatory sandbox way. But now it seems that Facebook is more decisive, that is to say, in order to comply with the regulations, it has completely put the initiative in the US supervision. If the US supervision does not agree, Facebook will not participate in this project.
It is natural for a large company. It is understandable that such a large company receives special attention from the regulators, and every move will be greatly affected. Therefore, I can understand Facebook's approach, but his behavior is not conducive to the launch of Libra.
Maybe it should be like I suggested, now some small countries and small regions try it out first, and then let the supervision slowly see some results, and move forward in the interaction, which may be better, but it seems that this road has already passed. is blocked.
One thing that I find very innovative and interesting is that he mentioned the importance of Libra to American innovation, linking Libra with the dominance of the US dollar and American values, which is quite innovative.
I think this is very skillful. In our opinion, this is just a skill. In fact, there is not much room for deliberation. He said that if Libra is not implemented, innovation will be suppressed, and innovation is very important to the United States. Libra’s dominance of the dollar and American values are very important. I agree with this point, but I think the example he gave is a bit far-fetched.
He took China as an example. It is said that if Libra is not implemented and is opposed, other countries, such as China, will occupy a dominant position in this regard. It sounds like Congress and U.S. regulation can be touched, because no one wants the hegemony of the dollar in the future, and Western values will be led by China, which of course touches the pain point of regulation.
But if you look at it in reality, it is not as serious as he imagined. What China wants to launch is the central bank's digital currency, or it is limited to the country. The companies and scope of use of Facebook's Libra have not reached China. The two systems are parallel and there is not much competition.
That is to say, it is impossible for the digital currency of the People's Bank of China to go beyond national borders for global payments. There is still a long way to go for Facebook Libra to come to China. It should not be allowed in China, because after all, it is impossible for Facebook to be allowed in China. , I think this is just a technique used by Xiao Zha.
Of course, he also mentioned that other companies are also launching digital currencies, which are not compliant. This is actually an allusion to USDT, a stable currency. It is now illegal in the United States, but it is also used all over the world. This can be used as an example.
But he mentioned China purely to take advantage of the bad relationship between China and the United States to touch the US Congress and regulators. This is a technical question.
2. Long Baitao: The various voices of the US Congress on Libra are "small episodes" and do not affect the overall situation
Libra fundamentally protects the interests of the traditional legal currency system, because it uses legal currency (and/or national debt denominated in legal currency) as a reserve pool, which is a "pseudo-innovation" based on the traditional legal currency system.
Most people over-interpret Libra's subversion of the traditional system, so they misread the relationship between Libra and the Federal Reserve, or misread the relationship between Silicon Valley geeks and Wall Street capital.
Libra fundamentally represents the interests of the traditional fiat currency system. At the beginning of the release of the Libra white paper, everyone may be surprised that there is no traditional bank as a founding member. A natural guess is that Libra challenges the interests of traditional commercial banks.
If Libra announces to use Bitcoin or other native digital assets as a reserve, it will be a real subversion, but it will be firmly pressed to the ground by the Federal Reserve on the first day.
The obstacles Libra encountered in the US Congress can be understood as rationalizing this matter from a legislative perspective, so Facebook needs to communicate and coordinate with Congress representing a broader range of interests (outside Wall Street).
Congress seems to have a strong influence, but on the one hand, there is a lack of real professionals who can effectively prevent such projects (for example, the Federal Reserve is theoretically responsible to Congress, but Congress has never had enough professional skills to effectively hold Fed officials accountable , including the 2008 financial crisis, Bernanke and Paulson lied in public in Congress in order to protect the interests of Wall Street banks, contradicting themselves, Congress has nothing to do), on the other hand, it is greatly influenced by lobbying forces.
The largest lobbying force in the U.S. Congress comes from two industries, military industry and finance. A few days ago, members of Congress wrote to VISA/MasterCard threatening to support Libra, which may lead to the implementation of the highest standard of supervision on all related businesses (including their traditional payments), so the two chose to quit, but on October 18, Senate member Michael Rocks Write to the Libra node Anchorage to express support for Libra. Although it seems that Congress has a lot of controversy over Libra, the core idea is to figure out how to regulate and balance different stakeholders.
A congressman can freely express his opinion or write a letter requesting to "prohibit" many things, but he is far away from the document that actually forms the legal effect. The various voices of the US Congress on Libra are "episodes" and do not affect the overall situation.
3. Liu Changyong: Libra scared the central banks of all countries
Zuckerberg emphasized that Libra opposes any form of discrimination, but also emphasized that its purpose is to improve the financial status of the United States and maintain American democratic values. It is impossible not to discriminate against other countries and other values. So in order to obtain regulatory permission from other countries, is another set of rhetoric required?
This further shows that it is difficult for Facebook to issue a super-sovereign cryptocurrency based on private credit, and "super-sovereignty" is contrary to "compliance".
Libra anchors a basket of currencies, rather than anchoring a single legal currency. But if Libra is anchored to the US dollar, it will not have much impact, and it may not be as good as USDT.
It's just that Libra's contribution to the crypto economy cannot be denied. It has scared the central banks of all countries and accelerated the process of digital currency. Shenzhen has also become the central bank's digital currency experiment field, thanks to Facebook.
4. Gu Yanxi: Libra will definitely be launched
Democrats in the U.S. Congress have a lot of antipathy for Facebook. So these Democrats will do everything in their power to stop Facebook from doing this project.
American society is a commercial society, and the American government serves individuals and commercial organizations. In addition, Libra has also shown a high degree of flexibility. They will make various adjustments to move the project forward. So I believe this project will be launched.
5. House Rep. Sylvia Garcia: No deregulation because of China's 'threat'
If Mr. Zuckerberg wants to be king, he can be king of social networks. But I don't want him to have additional financial data on people, Zuckerberg has to address our concerns about the Libra project.
No deviating from the regulatory track by worrying about what China and Russia are doing on this issue right now.
