By
Bhushan Akolkar
April 26th, 2024
Even though Congress tried to inflict damage on Big Tech in hearings related to user data, antitrust concerns and Facebook’s Libra, it seems it has failed. That leaves Silicon Valley with little incentive to change.
After yesterday’s testimony of Calibra’s CEO David Marcus, expert witnesses, and former Commodity Futures Trading Commission (CFTC) chairman Gary Gensler, shared their perspectives with the lawmakers. We could hear a lot of skepticism in their words.
And while senator Gensler kept arguing that Libra is a security and should be regulated as such, CoinShares Chief Strategy Officer Meltem Demirors, tried to explain the difference between Bitcoin and Libra. She said:
“Bitcoin is decentralized, and Libra is highly centralized”
She also added that Bitcoin itself is a digital asset while Libra is backed by other assets. Also, she noted that anybody can download the Bitcoin code and run a node. On the other hand, you can not do that with Libra.
“Libra is not a cryptocurrency. I want to distinguish and draw a very clear line.”
She also said that, together with Libra currency, there will also be a Libra investment token that will be reserved for accredited buyers. That token, said Demerors, is capturing all the interest income from the reserve’s government securities.
As per other senators, they kept using inappropriate language through all the time of the hearing (and after). Senator Warren Davidson, known as a good Trump boy, even said the word “shitcoin.”
Davidson asked how is Bitcoin different from low-quality knockoffs. Demirors explained that as a decentralized currency with distributed infrastructure, Bitcoin can’t be easily and quickly changed by a single party.
Congresswoman Ortazio-Cortez said that currently Libra’s governed by Facebook, Uber, eBay, Spotify, Visa. She asked if they were they democratically elected? Marcus answered that they haven’t been democratically selected but that they have expressed they desire to be the part of the project. Cortez said:
“So we’re discussing a currency controlled by an undemocratically selected coalition of largely massive corporations. Do you believe that currency is public good?”
Marcus answered that they believe sovereign currencies should remain sovereign and that they do not want to challenge those currencies. He also didn’t want to answer that question, only said that it’s not up to him to decide.
From the issue of corporate control, Cortez pivoted to an issue of monetary policy saying:
“You stated yesterday in front of the Senate Committee that you would be open to accepting 100% of your pay in Libra. In the history of this country, there is a term for being paid in a corporate-controlled currency. It’s called ‘scrip.’
The idea that your pay could be controlled by a corporation instead of a sovereign government. Do you think that there is any risk here? We’ve seen from scrip, to the issues with how Facebook handled our elections, we’re seeing a destabilizing in our public goods.”
However, this discussion made quite a little revolution on Twitter. Among the optimistic ones are representatives of altcoins. CEO of Ripple Brad Garlinhouse tweeted:
I’m heartened by the (largely) thoughtful dialogue from this week’s congressional hearings on @Libra_ . Committee members are supportive of blockchain and payments innovation in the U.S., but skeptical that Facebook is the right steward given the history of broken trust. 1/4
— Brad Garlinghouse (@bgarlinghouse) July 17, 2019
He also wrote that he thinks this debate is healthy and necessary for the continued maturation of this industry. We need to ask and answer the tough questions, ensure our systems are battle tested, and have the proper oversight and regulations in place to protect consumers.
Garlinhouse also said that the real question is – what are American policymakers going to do to meet the challenges and the opportunities of this new world of innovation?
Famous hodlonaut tweeted:
The vibe I got from Congress today was:
Libra, why can't you be more like Bitcoin?
— hodlonaut 13%er 🌮⚡🔑 🐝 (@hodlonaut) July 17, 2019
American entrepreneur and Bitcoin proponent Charlie Shrem emphasized the obvious:
I have to say I'm so impressed with the level of knowledge of crypto from US Congressman and Congresswomen. They understand the difference between Libra and Bitcoin. They are worried about Libra, not #Bitcoin.
— Charlie Shrem (@CharlieShrem) July 17, 2019
WSJ’s Paul Vigna tweeted:
Okay, I know this is self-serving, but after two days of watching Congress talk about libra and bitcoin, seems we are now more than ever truly in the Age of Cryptocurrency. Whatdya say, @mikejcasey?https://t.co/Smn8UG6RJ2
— Paul Vigna (@paulvigna) July 17, 2019
After the hearing Marcus also went on tweeting saying:
Many thanks to Chair @RepMaxineWaters, Ranking Member @PatrickMcHenry, and the rest of the House Financial Services Committee for devoting so much time to discuss Libra today. We will take the time to get this right.
— David Marcus (@davidmarcus) July 17, 2019