Today, Mark Zuckerberg is testifying to the House Financial Services Committee about Facebook’s proposed Libra cryptocurrency. His testimony will begin at 10 a.m. Eastern (7 a.m. Pacific/9 a.m. Central.) The hearing is called: “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors.”
Zuckerberg Released His Testimony Before the Hearing
The hearing will be streamed in the Financial Services Committee’s official YouTube stream above.
According to a press release about the hearing, Zuckerberg is the sole witness in today’s hearing. The press release reads, in part:
In July, Chairwoman Waters and other Committee Democrats sent a letter to Facebook requesting an immediate moratorium on the implementation of Facebook’s proposed cryptocurrency, Libra, and digital wallet, Calibra.
Also in July, Waters convened a hearing entitled, “Examining Facebook’s Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System,” with testimony from Calibra CEO David Marcus. At the hearing Committee Members discussed a draft bill, the “Keep Big Tech Out of Finance Act.” The draft legislation prohibits large platform utilities, like Facebook, from becoming chartered, licensed or registered as a U.S. financial institution (e.g. like taxpayer-backed banks, investment funds, and stock exchanges) or otherwise becoming affiliated with such financial institutions. The bill also prohibits large platform utilities from establishing, maintaining, or operating a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function as defined by the Federal Reserve.”
The hearing is taking place in 2128 Rayburn House Office Building. This is a full committee hearing announced by Congresswoman Maxine Waters of California.
Zuckerberg released his written testimony for the hearing ahead of his appearance. You can read his full seven-page-long testimony here.
In the testimony, Zuckerberg says that Libra is an essential part of expanding banking’s access worldwide. He says: “There are more than a billion people around the world who don’t have access to a bank account, but could through mobile phones if the right system existed. This includes 14 million people here in the U.S.”
Zuckerberg also acknowledges that trust issues regarding Facebook might make this a tougher sell, but says Libra is about promoting “financial inclusion through a safe, low-cost, and efficient way of sending and receiving payments…”
He notes: “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 also says later in his remarks: “When it comes to Calibra, I know some people wonder whether we can be trusted to build payment services that protect consumers. We recognize our responsibility to provide people with all the protections they expect when they are sending and receiving payments online. We already do this across our services. For example, every day, people buy products through Instagram Shopping, which helps businesses of all sizes show customers things they might be interested in. People purchase goods from each other on Facebook Marketplace and send money to friends and family through Messenger.”
He also notes in his prepared remarks: “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.”
Zuckerberg says that Facebook won’t launch the Libra system until it’s approved by U.S. regulators.
In recent weeks, Booking, Mercado Pago, eBay, Stripe, PayPal, Mastercard, and Visa left the Libra Association.
Zuckerberg notes in his prepared statement that Libra isn’t intended to replace sovereign currency. “Finally, there’s the question of whether Libra is intended to replace sovereign currency, and whether it’s appropriate for private companies to be involved in this kind of innovation. 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.”
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