U.S. Senate publishes David Marcus testimony ahead of Libra hearing

15 Jul, 2019 | Updated: 15 Jul, 2019
by David Robb
U.S. Senate publishes David Marcus testimony ahead of Libra hearing

The head of Calibra, the Facebook subsidiary behind its recently-announced crypto project, is due to testify before a U.S. Senate committee on July 16. The text of David Marcus's testimony on Libra has recently been published by the Senate. 

Since the Libra whitepaper was released just under a month ago, many legal authorities have expressed concerns about Facebook's new financial venture. David Marcus has been taking action to assuage fears, including recently writing a letter to Congress, after a group of particularly sceptical members of the House published their own statement on behalf of representatives as well as consumer associations.

Both Congress and the Senate have hearings on Libra scheduled for the upcoming week, and the Senate has now allowed the general public access to Marcus' initial testimony to their committee. 

Marcus' comments are primarily defensive, reassuring senators that he and his team will be fully transparent about how Libra operates, and that Calibra will work closely with external experts and regulators as closely as possible. He claims to agree with Federal Reserve chairman Jerome Powell "that the process for reviewing Libra needs to be patient and thorough, rather than a sprint to implementation...We approach (the project) with humility and a commitment to engage with experts in law, finance, economics, security, compliance, and blockchain technology, as well as with the regulators and policymakers".

He claims that the Libra stablecoin will "help deliver a giant leap forward toward a lower-cost, more accessible, and more connected global financial system", and describes the crypto as "a payment tool, not an investment. People will not buy it to hold like they would a stock or a bond, expecting it to pay income or increase in value. Instead, Libra is like cash".

Marcus goes into detail about the structure and management of the Libra eco-system, and insists that Facebook will relinquish control over the network and the crypto, once it has been set up. 

As for Facebook's own interests and those of the subsidiary that he is in charge of, Marcus claims that he doesn't expect "Calibra to make money at the outset, and Calibra customers’ account and financial information will not be shared with Facebook, Inc...But we expect that the Calibra wallet will be immediately beneficial to Facebook more broadly because it will allow many of the 90 million small- and medium-sized businesses that use the Facebook platform to transact more directly with Facebook’s many users, which we hope will result in consumers and businesses using Facebook more. That increased usage is likely to yield greater advertising revenue for Facebook".

Towards the end of the opening statement, Marcus addresses what will be perhaps the most important issue in the hearing, that of Libra users' privacy. Anticipating the queries that are likely to be raised, given Facebook's history of data misuse, he claims that "Calibra believes that customers hold rights to their data and should have simple, understandable, and accessible data-management controls. Calibra will not share individual customer data with the Libra Association...Calibra will not share customers’ account information or financial data with Facebook".

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