At 10 o'clock last night, the US Congress began a second hearing on Libra. The Senate Housing, Banking, and Urban Affairs Committee was organized for the hearing, and David Marcus, the blockchain division and Libra project leader, who was responsible for the war.
The hearing lasted nearly seven hours. The members who participated in the hearing can be roughly divided into three types: the first is that they have never seen the Libra white paper, the members of Marcus Science, and the second is full of grievances against Facebook. The whole process uses data black history to get Marcus's speechless members; the third is (or deep or shallow) understanding of the blockchain and digital currency, and hopes to have a positive dialogue with Marcus to actively seek out the supervisory program.
In this hearing, Members' concerns about Libra can be summarized as follows:
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1. The trust crisis caused by Facebook data leakage: So Members think Facebook’s promise is not credible
2. Facebook motives are not pure: Libra is definitely for profit, but it hides the real purpose.
3. Libra's attributes are unknown: is it a security? ETF? Still a commodity?
4. Libra's influence on the US economy and the US dollar
The third type of members mentioned above are very few. The author found that one of the members was particularly special at yesterday’s hearing. He has read the Libra white paper to understand the conflicts between decentralized digital currency and regulation, and also mentions that the innovation of “Zhongben Cong and Bitcoin White Paper Creation” is unstoppable.
The senator is Patrick McHenry from the Republican Party and he is also a senior member of the Financial Services Commission. The following is a speech by McHenry and attached to his "Tear" link with Marcus:
1. McHenry's speech: The innovation created by Satoshi Nakamoto and Bitcoin White Paper is unstoppable
We are here today, not to make headlines, we want to hear more through hype. I have seen a news headline that I like very much: Libra members promote business development, is Facebook creating a cryptocurrency morphine?
Washington must go beyond hype and make sure that innovation does not disappear here. Just because we don't understand the new technology plan doesn't mean we have to choose to ban immediately, especially when the plan is still in the planning stage.
Let's face it, honestly, we are facing Facebook. I am also very skeptical inside. We may make it (Libra) a political topic, or choose to implement a thoughtful and government-based regulation. The latter is the purpose of my attendance at the hearing today.
In fact, no matter whether Facebook is involved or not, the change has arrived. Digital currency already exists and blockchain technology is real. Facebook has entered this new world just to adapt to the development trend.
The white papers of Nakamoto and Bitcoin have created this new world, and people are constantly involved. This is an unstoppable force. We should not stop this innovation, the government can't stop this innovation, and those who tried to stop have failed.
So the question is, what should American policymakers do to deal with the opportunities and challenges brought by this world full of innovation?
Some politicians want us to live in a permission-based society. In other words, you have to go to the government to seek refuge before you start to innovate. These politicians are more inclined to kill innovation in the cradle.
But there are also politicians who believe in innovation. They believe that our economy is built on generations of entrepreneurs and innovators. Through constant competition, testing, iteration, and patching, we are here today.
What is to be made clear here is that innovation does not mean calling for breaking the rules and then taking a step by step. When it comes to finance, we must consider that consumers and investors are protected.
So, Mr. Marcus, let's get started. Please answer my question. My colleagues at the Republican Party and myself want to try to understand innovation, not to ban it before everything starts. Based on what we have learned, we will assess whether the current regulatory framework can meet the needs of this innovative technology. This is why we came here today.
I don't have a crystal ball (I can't predict the future), I don't know if Libra can do a good job of inclusive finance. Reducing the cost of remittances really represents an opportunity, which means that the flow of funds will be lower and more convenient than today. But this may also be just a strategy to combat Facebook's competitor Twitter. We will wait and see.
But what I can be sure of is that the Republican Party is ready to work with innovators to successfully deploy reliable technology in the United States before we lag behind other countries.
Therefore, I appeal to my colleagues to participate in and support innovation and entrepreneurship. This is also the foundation of the United States.
2. Q&A: Is Libra a securities? Decentralized trade-offs? Libra and WeChat Alipay competition
Question (MrHenry): I have read your white paper. I understand the characteristics of digital currency and digital technology, so what is Libra?
A (Marcus): Mr. Member, Libra is a digital currency, a digital currency supported by reserves.
Q: Is Libra a security?
A: We don't think it is a securities, Mr. Member.
Q: Is Libra a commodity?
A: Mr. Member, based on current US law, we think it may be a commodity, but we regard it as a payment tool.
Q: Is Libra an ETF?
A: No, Mr. Member.
Q: If Libra does not fall into any of the above categories of regulation, how do you achieve compliance?
A: Mr. Member, we have several ways to achieve compliance: First, Calibra Wallet is registered as a currency service business in the Ministry of Finance and FinCEN (Financial Crime Enforcement Network), we are applying and have obtained some national licenses, we It works the same way as other wallets…
Q: You are talking about Calibra. I am asking Libra.
A: The Libra Association is currently actively engaged in dialogue with the G7 Working Group and the FINMA (Swiss Financial Market Authority).
Q: Some people are uncomfortable with decentralized currencies or things, that is, privacy, but in the end they will also involve KYC and AML factors, and the problems are difficult to solve. As you mentioned in the white paper, there will be a transition after 5 years. You will move from permissioned to non-permitted (permissionless) system. After the handover is completed, since it is already a completely decentralized digital currency, how do you solve it? The contradiction between AML and KYC?
A: This question is very important, Mr. Member. We think this works because the Libra Association is always able to make rules when KYC and AML are needed. After the handover is completed, most of the verifiers are likely to be the party providing the service…
Q: Do you mean that your Calibra wallet will do AML and KYC instead of Libra? What you mean is that this transition has nothing to do with technology, just a change in the wallet node?
A: Yes, Mr. Member. The Libra Association will continue to implement the AML program and will be regulated by FinCEN.
Q: Do you think you are more like Western Union or your old club PayPal?
A: Mr. Member, I think it depends on which part you are referring to. If it is a Calibra wallet, it is more like PayPal, because the payment system is also operated; if it is the Libra Association, we are still conducting a dialogue study.
Q: Do you think the things created inside Facebook are competitors of Alipay, WePay, Venmo and PayPal?
A: Yes, Mr. Member. We have a lot of cooperation wallets at the network level, but from the perspective of the wallet, they are our competitors.
Q: Does the user data of Calibra belong to Facebook data? Or will it be independent?
A: Mr. Member, we promise that the data is completely independent.
Q: The last question, if you want to become a competitor of Alipay and WeChat, why choose Switzerland, why choose a basket of money support? Why not use the dollar directly? Thinking about how to reduce transaction costs seems to be your ultimate goal.
A: Mr. Member, first of all, I want to say that we have chosen Switzerland. This does not mean that we are avoiding supervision, but because we want Switzerland to become the international arena of the Libra Association. Secondly, we hope that Libra will become a global digital currency and become a currency unit… (time to)