Switzerland inquires, VISA reverses, Libra is worried

Judging from the feedback from all parties, there is neither practical cooperation with partners nor too much communication with regulators. Libra is actually just an empty shell.

On July 25th, the Swiss Federal Data Protection and Information Commissioner (FDPIC) released a message on its official website that it had officially sent a letter to the Geneva-based Libra Association on July 23 to inquire about the status of the Libra project. And hope that the Libra Association will respond to his announcement on July 17, 2019, stating their official position.

The Federal Data Protection and Information Committee (FDPIC) noted that Libra project leader David Marcus mentioned before the US Senate hearing on July 16, 2019 that the Libra Association project plan and his comments were in the Libra Association and Relevant governance issues FDPIC will serve as its supervisory authority. However, the project has not yet contacted FDPIC. FDPIC stressed that data protection will be considered as one of the core elements of the project, and FDPIC needs to know the specific process and related risks of the project as soon as possible to assess its level of regulation and scope.

It is worth mentioning that today, Facebook founder and CEO Mark Zuckerberg posted an open letter on Facebook, sharing the company's latest achievements and future vision in the last quarter, with a focus on Facebook's latest project, Libra. He said that Facebook and the Libra Association, a group of 27 other institutions, created a new currency called Libra, which allows people outside the banking service to use a safe, stable and well-regulated Encrypted currency. Mark Zuckerberg also made clear in this letter that both Facebook and the Libra Association plan to work with regulators to help them resolve all concerns before Libra is ready to launch.

However, it is clear that from the current situation, regulators do not want to cooperate with Facebook. It is difficult for Xiaozha to solve all the concerns of the regulatory authorities. In fact, after the hearing of the Financial Services Commission (FSC), it was a bad news for Libra. Although there was no clear result after the two hearings last week, it is clear that David Marcus’s response at the hearing did not satisfy many members.

As Congressman Martha McSally said at the hearing, "I don't trust you, how does Facebook make us trust?" This is also the question that most of the members asked at the two hearings.

Trust issues are now spreading to the private sector. According to a survey by the instant messaging app Viber, 49% of UK and US users say they don't trust Facebook in terms of digital currency. These respondents said that when using Libra, they would not believe that Facebook could ensure the security of their private information. In the UK, 28% of respondents said they were undecided, and only 4% said they would trust Facebook. The results of the survey in the United States are similar to those in the UK, with only 2.5% of respondents saying they would trust Facebook.

Libra’s negative news is still escalating. On the second day of the FSC hearing, the seven countries reached a consensus on the attitude of the project. “In any case, possible stable currency programs and their operators need to meet the highest standards of financial regulation, especially in anti-money laundering/terrorist financing, to ensure that they do not affect the stability of the financial system or consumer protection. The meeting of the G7 finance ministers and central bank governors mentioned in their summary report. On behalf of the G7 Task Force, ECB Executive Committee member Benoit Coeure presented Libra's investigation report to the meeting, stating that private companies have the same privileges as the state in creating payment methods in the absence of regulation.

If the disapproval of regulation and the distrust of the people are only external factors, other members of the Libra Association seem to be unable to withstand the pressure and begin to show different voices. On July 21, the Open Markets Institute, Public Citizen, Demand Progress Education Fund, and the Revolving Door Project jointly published an open letter from the four prominent US civil rights protection agencies, requesting the 27 founding members of the Libra Association to withdraw from the Facebook-led cryptocurrency program. The Open Letter believes that the Libra program is global and is a currency with significant competitive, political, financial and social impact. The program's apparent purpose is to provide products and services to 1.7 billion people without traditional banking services. But its goal is actually not clear, and its leadership structure is also problematic. The above four civil rights agencies hope that members of the association including Visa, MasterCard, PayPal and Uber can withdraw.

Perhaps it is difficult to resist such a surging voice, Alfred Kelly, CEO and chairman of the global payment giant Visa, has to come forward to face the problem. He said that Visa is not the official partner of Libra, the encryption project announced by Facebook last month. . For the prospect of Visa's future partnership with Libra, Kelly said that the full Libra project to join Facebook will depend on a number of factors, such as whether the organization can meet all necessary regulatory requirements. Kelly believes that this cooperation is still "very preliminary."

Judging from the feedback from all parties, there is neither practical cooperation with partners nor too much communication with regulators. Libra is actually just an empty shell.

Source: Financial Network · Chain Finance

Author: Changfeng