On Tuesday, Facebook executives attended the Libras hearing held by the US Senate. According to the latest news from foreign media, on Wednesday, David Marcus, head of Facebook's digital currency business, continued to be questioned by lawmakers at the hearing of the House Financial Services Committee on Facebook's digital currency.
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The tone of the hearing was much more pronounced than that of Marcus’s testimony at the Senate Banking, Housing and Urban Affairs Committee on Tuesday. Several members of the House of Representatives expressed doubts about Facebook's decision to delve into digital currency and financial services before addressing issues such as privacy and intervention in elections.
California Democrat Brad Sherman made the harshest and most ridiculous criticism of Libra, comparing its potential consequences to the 9/11 terrorist attacks.
“Some people tell us that innovation is always good,” Sherman said. “The most innovative thing that has happened in this century is Osama bin Laden’s innovative idea of smashing two planes into the World Trade Center. This is the most important innovation, even though it’s probably more harmful to the United States than this. Big."
Sherman called on Facebook CEO Mark Zuckerberg to personally accept the question from Congress and said that Zuckerberg "need to be an advocate of privacy, but he is developing a tool for drug dealers, traffickers, terrorists. Privacy evasion, tax evasion and sanction tax evaders provide privacy protection."
The other members of the committee are not so pessimistic, but they are still critical of Facebook's Libra currency program.
"This is not Silicon Valley," New York State Democratic Congressman Nydia Velasquez told Marcus. "You can't solve problems while doing it."
Bellasquez, Chairman of the Committee, Mike Waters, and New York State Democratic Congressman Maroni asked Marcus whether he would restrain himself and suspend the Libracoin plan before policymakers develop appropriate rules and regulations.
Marcus told Waters, "I promise to wait for us to get all the appropriate regulatory approvals and solve all the problems before taking action."
"This is not a promise," Waters responded.
Maroni asked Marcus whether he would carry out a Libra coin pilot project and launch Libra coins to 1 million users under the supervision of government regulators. Marcus said that Facebook proposed this plan and a white paper before the full launch of Libra, in order to communicate with the regulator.
Maroni said: "I don't think you should issue Libra coins at all, because issuing new currency is a core function of the government. But at least you should agree to do this small-scale pilot project first."
What is Libra Coin?
US lawmakers demanded that Marcus clarify the attributes of Libra and the financial system surrounding Libra.
“What is Libracoin?” Senior Senator Patrick McHenry asked Marcus whether Libra is a security, commodities or an exchange-traded fund (ETF).
Marcus said he believes that Libra is not a security or ETF and says it can be considered a commodity.
McHenry asked Libra to be more like PayPal (mobile payment provider, Marcus once served as president of PayPal) or Western Union.
Marcus said that this will depend on the specific transaction, but it is usually more similar to PayPal.
Colorado Democrat Ed Perlmutter asked if Libra is more like a bank or a transfer software like Venmo. He emphasized the tense mentality of parliamentarians on the new currency.
Pumat said: "We all have the same question to ask you, this is the resistance you feel, because we think you are a bank, but you are not exactly like a bank. If you are a bank, we will treat you Strict supervision, because we see a lot of people losing money in areas without supervision. This is the resistance I feel, I want to support your innovation, I want to support your efficiency, you bring efficiency to the negotiating table, but I don't want anyone to be hurt."
In response to the question of Republican Congressman Scott Tipton. Marcus said that the Libracoin project does not intend to provide banking services, but he acknowledges that it would be reasonable to accept banking supervision if banking services are provided. Throughout the hearing, Marcus emphasized that Libraco is concerned with “payments” rather than banking services.
Impact on the dollar
Members also expressed concern about the impact of Librae on the status of the US dollar.
“Tell me how Librais does not harm the sovereign currency and the power of the central bank. In other words, is Libra currency ready to weaken the status of the central bank and provide greater freedom outside the central bank?” Republican Congressman Andy Barr Andy Barr) said so.
Marcus replied: "I want to be very clear. We don't want to compete with the US dollar or sovereign currency. This is why we carry out asset reserves. Even in our wildest dreams, we will never approach any of the things you mentioned. The size of a currency."
Marcus did not directly answer the question of New York State Democratic Congressman Alexandria Ocasio-Cortez. He asked if Librae should be a public good.
It is reported that the previously published Libra coin white paper does claim that the global currency "should be designed and managed as a public product."
Guam Democrat Michael San Nicolas said he does not believe that Facebook has not predicted the average amount of money held by Libra users.
He said that the potential huge impact may have an impact on the United States, because a large part of the US gross domestic product is denominated in US dollars, while the US population is relatively small.
He said: "The money is sucked away from the US financial system, and then the conspiracy group uses Libra and digital wallets to do anything. After that, interest rates will rise in order to attract dollar-denominated investors, higher interest rates. It will hurt the US economy and US employment, higher interest rates, and perhaps more importantly, will increase the financing costs of US military operations and national security-related funds."
Some representatives asked Marcus, how 27 management companies and Facebook of Libra were selected.
Marcus replied that these members were not democratically elected. He said: "Membership is open based on certain criteria. The other 27 companies that joined the first group have the same desire to establish this network and solve problems."
Republican Congressman Anthony Gonzalez asked Marcus how many members Facebook recruited to join the association. Marcus only said that the company had contacted "many companies."
California Democrat Katie Porter asked which agency would be responsible for adjusting the 1:1 ratio of Libra's reserve assets. "What can stop the Libra Currency Association from changing the content of a basket of currencies, such as 100% purchase of Venezuela? Currency, which will cause the Libra currency to become worthless."
Marcus said: "That is why we believe that we need the Fed to conduct proper supervision." He added that the organization is working with the G7 working group to determine who will be responsible for regulation.
Some committee members said that Facebook’s claim that it provides services to people who are not covered by banking services seems to be out of touch with the reality of people who often lack financial knowledge.
Marcus told Ayanna Pressley, a Massachusetts Democrat, that Libra does not need a bank account, but needs a smartphone and does not provide interest on deposits.
Rashida Tlaib, a Democrat from Michigan, asked if people without bank accounts "must trade with their own data and privacy." Marcus said they won't do this because any user can choose to use a digital wallet that doesn't involve advertising.
In response to questions from Massachusetts Democrat Stephen Lynch about account privacy. Marcus said, "We will not share financial data and account data with Facebook."
Democrat Rep. Sylvia Garcia asked how Facebook can make money from the Libra currency business without charging users.
Marcus said that Facebook will benefit from two aspects: First, he said that 90 million merchants or companies on the Facebook platform will be able to trade each other. Marcus expects business growth on the platform to help small businesses expand and eventually invest more in Facebook advertising.
Secondly, Marcus said that Facebook will eventually cooperate with banks and other institutions to provide more services and hope to make money from it.
Wisconsin Republican Representative Sean Duffy has raised the issue of user qualifications, which has become a common topic for Republican lawmakers. He said that some people who are banned from using Facebook social networks can use Libra. "I don't know yet," Marcus said.
Duffy also asked if the law-abiding gun dealer could use the system. Marcus said: "We have not yet formulated this policy." (Tencent Technology)