Among other things, Zuckerberg is planning to take Facebook out of the Libra project if certain principles are not followed.
Ever since Facebook officially announced its plans to float a digital currency and then released the Libra whitepaper, there have been very polar reactions to the idea, which continue to this day. The United States Congress right from the start has made it clear that they are not excited about the idea and would prefer it doesn’t continue. We have already reported that as part of the process of seeking regulatory support, Facebook CEO Mark Zuckerberg has been obliged to support his position about Libra and all of the concerns with floating this project in front of the Congress.
For example, Congresswoman Ann Wagner representing Missouri’s 2nd congressional district, fired at Zuckerberg, about the fact that the Libra Association that is supposed to oversee the asset is now about 7 members short and made a point to grill Zuckerberg about why former partners no longer have faith in the project. Zuckerberg responded, admitting that Libra is a “risky project”, suggesting that the departed members lost their certainty.
Rep Wagner further referenced a report about child abuse backed by the Department of Justice (DOJ) which stated that at least 16.8 million of all reported cases which total 18.4 million worldwide are found on Facebook. This, she said, as a point against Facebook’s desire to use end-to-end encryption with the Libra, claiming that this feature would make the Libra difficult to monitor if the platform already contains shocking content without it.
Perhaps the most biting remarks came from Congressman Bradley Sherman from California’s 30th congressional district. Sherman used his allotted five minutes to pick the Libra apart, without asking Zuckerberg any question at all or giving him a chance to respond. According to Sherman, Zuckerberg’s stated desire to use the Libra as a way to meet the needs of the banked and underbanked does not hold water because the social media giant as well as the CEO himself, has done nothing in that regard so far. He said:
“You’ve done no effort to help the unbanked at any other time.”
He also suggested that it was laughable “for the richest man in the world to come here and hide behind the poor people.”
Sherman also discussed cryptocurrencies in general and how they can be used to facilitate crime, something that cannot easily be done with the US dollar. According to him, the U.S. dollar is an “excellent currency” and caters to all financial needs “except that it’s bad for tax evaders and drug dealers.” Sherman suggests that cryptocurrencies should not be allowed to operate as they can easily be exploited for unscrupulous activity by criminals.
Sherman further warned Zuckerberg about the possible effect of the Libra even if Facebook finds a way to go ahead without breaking any laws. Sherman stated:
“I know you’ve got a 100 lawyers that will tell you that what you’re doing is legal and you’ll be safe. With the kind of harm [possible with the Libra], they could be wrong.”
Zuckerberg however told Congress that even though he alone cannot stop Libra, he would be willing to pull Facebook out of it if things don’t proceed properly. Asked by Congressman William Luetkemeyer who represents Missouri’s 3rd congressional district, whether or not he’d be willing to stop the project, Zuckerberg answered in the affirmative.
“I will certainly stop Facebook’s part of it. The independent Libra Association is a separate thing that exists at this point and if I feel like Facebook can’t be a part of it in keeping with the principles that I’ve laid out then Facebook won’t be a part of it,” stated he.