Facebook Inc’s top official overseeing the launch of its Libra crypto currency plans to tell U.S. lawmakers the company will not launch the digital currency until regulatory concerns and approvals are fully addressed.
David Marcus, who oversees Facebook’s block chain efforts, also plans to vow that Libra is not being built to compete with sovereign currencies or interfere with monetary policy.
“The Libra Association, which will manage the (Libra) Reserve, has no intention of competing with any sovereign currencies or entering the monetary policy arena,” Marcus will say, according to prepared testimony posted by the Senate Banking Committee.
“Monetary policy is properly the province of central banks.”
Marcus said in his prepared testimony that the Libra Association, the group of companies behind the crypto currency led by Facebook, plans to register as a money services business with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
And also it will fully expect to comply with anti-money laundering and Bank Secrecy Act rules.
Since announcing the Libra project in June, Facebook has faced a steady torrent of criticism and skepticism from policymakers across the world, citing concerns over data security, money laundering, and consumer protections.
Marcus is scheduled to testify on Tuesday and Wednesday before congressional committees overseeing financial issues where several members have suggested the product be barred.
Addressing some of those concerns, Marcus says in his testimony that partners providing financial services with Libra will be required to comply with anti-money laundering rules.
The Libra Association will not hold personal data of users beyond basic transaction information, and personal information provided to Calibra, the digital wallet Facebook is developing to hold Libra, will not be shared with the social media company and cannot be used for targeting ads.
Marcus adds that he expects the Swiss Federal Data Protection and Information Commissioner will be Libra’s privacy regulator, because the Libra Association is headquartered in Geneva.
The association is also in preliminary talks with the Swiss Financial Markets Supervisory Authority on “an appropriate regulatory framework.”
While promising Libra will adhere to relevant laws and regulations, Marcus will try to sell lawmakers on the product’s merits as well, arguing the United States should not stifle such innovation.
“I am proud that Facebook has initiated this effort here in the U.S.,” his testimony reads. I believe that if America does not lead innovation in the digital currency and payments area, others will.
“If we fail to act, we could soon see a digital currency controlled by others whose values are dramatically different.” (Reuters/NAN)