Facebook Hearing Record | Mark Zuckerberg is determined: for compliance, will not rule out the Libra Association

At 10 pm on October 23, Facebook CEO Mark Zuckerberg attended a hearing from the US House Financial Services Committee to study the impact of Facebook's financial services sector.

Zuckerberg’s testimony was made public before the hearing. Zuckerberg promised that Libra will not be released without the approval of US regulators. In addition, he also said that if the United States does not support innovation, other countries will occupy financial leadership, especially China.

Libra

Zuckerberg’s testimony mainly consists of the following points (full version stamp here ):

About Libra – Facebook and Calibra do not collect users or share user information or financial data, except to prevent fraud or criminal activity; Libra is by no means an attempt to create a sovereign currency, monetary policy is always the responsibility of the central bank; Libra and its mandate The payment company will be subject to comprehensive anti-money laundering, counter-terrorism financing and sanctions monitoring.

About Discrimination – Facebook is always taking steps to prevent users from being discriminated against on this platform.

About Diversification Commitment – Facebook plans to have at least 50% of its employees in the next five years be women, people of color and other vulnerable groups.
The hearing lasted more than five hours, and this article excerpts Zuckerberg's response to key questions about the Libra issue:

Q: Why did you set up the Libra Association in Switzerland instead of the United States? Is it because of the regulatory certainty of this type of technology in Switzerland?

A: The Libra Association is independent and we want to build a global payment network. There are a large number of international organizations in Switzerland. My confirmation is that Switzerland is far ahead in the willingness to work with such systems. The Libra Association is independent of our existence, we just help it develop and it doesn't control it. But today I just want to make a promise that Facebook will not launch a product or service until it is internationally supported, with the full support of US regulators.

Q: Why do you want to do Libra? Is it to compete with global competitors such as Alipay and WeChat? Why not just make a Facebook version of Alipay?

A: This is only part of the reason. The other part is because I think the US financial infrastructure is outdated. Regarding payment, we have two plans. One is to establish a payment system, and to establish a payment system based on the current financial system. This is less controversial. The second is Libra, we are just rethinking the current financial. system.

I think they (Alipay and WeChat) are not only competing with us, but also competing with all companies in the United States. The infrastructure they are doing is somewhat more modern than the United States. After we published the Libra white paper, China immediately announced a partnership with many large companies to study the digital renminbi, which they plan to launch in the coming months. Q: You mentioned in the testimony that Libra will not be launched unless it is approved by the US regulatory authorities. Which regulators do you refer to, and what kind of license is most necessary for you?

A: I think it is all US regulators. Different institutional licenses are required for different matters, including those working in areas such as financial stability, crime prevention, fraud, and terrorism. I think the process that will be handled by different regulators will be different, but we will not launch Libra anywhere in the world until we address all regulatory issues.

Q: Can you promise that all wallets on the Libra network are not anonymous?

A: We have seen a large number of different cryptocurrency projects, all of which are completely decentralized and deregulated. And we want to be a safe and compliant alternative. The digital payment field needs such a thing. As a large company, we don't do something that is non-compliant and decentralized. We work with the government to comply with the standards required by all world-class payment systems such as AML.

Q: Why have so many founding members left the Libra Association recently?

A: This project is too ambitious, a company can't do it. This is why we established this independent Libra Association. This project is very complicated and there is risk as you said.

Q: Libra's goal is to help people who don't have a bank account, but people who don't have a bank account basically don't trust the bank. They certainly don't believe in Congress, but you promise to work with us. Is this a big obstacle to Libra's adoption?

A: Every day, billions of people use our services because they can share content, information, photos or comments with people they care about. This operation is more than 100 billion times a day because they know that this content can be passed on to They want to share the hands of people. I think that if we can make this project, there may be people who are unwilling to use it because they don't trust or dislike us. This is why we set up an independent association and will contain a lot of wallets. But I think that doing this allows people to make their own choices, choose who to trust, and what to use.

Q: If this project cannot be advanced, are you willing to stop?

A: As a representative of Facebook, I will stop this part of our actions. But the Libra Association is independent, and if we don't think Facebook can continue to participate, then Facebook will quit.

Q: What impact do you think Libra has on the US dollar reserve position?

A: Since the reserve for this project is mainly in US dollars, I think Libra can effectively expand the status of the US as a financial leader, rather than bring risks. We certainly need to pay attention to financial stability, but I don't think we can sit here and take it for granted that because the United States is now the leader, it will always be the leader in the future. We need innovation, innovation means risk, and we need to address these risks. If we don't innovate, it will affect our leadership position.

Q: The US dollar is now the main currency of Libra reserves, which is a good thing for the US dollar at this stage. In the unlikely event that Libra is accepted by the mainstream, and then the Libra Association agrees to reduce the dollar reserve and add RMB reserves, this is worrying. Have you ever worried about this problem?

A: My confirmation is that this is a question we need to study in advance. I can't speak on behalf of the independent Libra Association, but if the regulator wants to set some restrictions on this, I think it is reasonable.

Q: What are the benefits of Facebook's participation in Libra?

A: We have created the most widely used communication app. And Libra's goal is to enable people to send transactions as easily, quickly, and cost-effectively as sending a message. I think it would be useful to add the ability to send funds to the world's population in communications applications.

Q: Before David Marcus said that you passed the Swiss regulatory authorities, but the other party later denied that you have passed the Swiss regulatory authorities.

A: Of course. I think the reason for this misunderstanding may be that he is in contact with FINMA (Swiss Financial Market Regulatory Authority) (and not the same one).

Q: You said that you will not launch Libra as long as you don't get approval from the US regulatory authorities. What if the Libra Association is bent on it?

A: Then we may have to withdraw from the Libra Association. We will give advice, but it is not clear whether the Libra Association will agree with us.

Q: Why create a private currency instead of choosing an existing currency for your payment network?

A: Libra's goal is to make a global payment system, not a currency. It is because of its global nature that we believe that it should not rely on the currency of a single country. But because we are a US company and the US economy is the strongest in the world, it makes sense to set the main reserve as the US dollar, which can also expand the US financial leadership. We don't know what the future is. I personally just want to make a global payment network, instead of focusing on the reserve. Regarding the payment system established on the sovereign currency, I think there have been some related discussions.

Q: Do you think Libra is money?

A: I think Libra is a payment system. The dollar is very strong and we don't want to influence the dominance of the dollar.

Q: Why does the private sector make digital currency like Libra faster than the Fed?

A: I don't think I have a position to judge other people can't do their own experiments. I just think that under the system of the United States, more people should be encouraged to find more small and medium-sized enterprises or large enterprises, even the government, to try new things. I think this is an area where our financial system is stagnant. This area is very important, and any project that comes out of it needs to face risks. We should address these risks, which is why regulators have a role to play. But I don't think it's risky to try new things. So I can't say that Libra or my thoughts are the best. I hope that others can try something different so that they can better serve the world's population.

Q: What other countries, especially China, are mainly doing in the digital currency field?

A: I think that for Libra, Chinese companies will be the main competitors. I understand a lot about Libra risks and concerns that may affect the status of the dollar, but we must be more vigilant about the Chinese financial system becoming the new standard. Because of this, it is difficult for us to implement effective sanctions and protection and global supervision. This is my concern.

Q: Why not just make a digital dollar directly? This will meet regulatory rules.

A: From the perspective of the US regulatory authorities, this is indeed much simpler. But Libra is a global payment system that may be less popular.

Q: Can Libra be anonymously transferred based on current code?

A: It is possible to make such a system, but the focus is on policy issues.

Q: Many people regard Facebook's move to Libra as an important step in the popularity of bitcoin and blockchain. What do you think?

A: I think cryptocurrency innovation and decentralization can be very valuable, but it is not something that big companies like Facebook can bring to the industry. Given our position, we can't create something that is completely decentralized, and ignores issues such as financial stability. We also want to work with regulators to meet the highest standards. I support innovation in this area, but I think the US financial system is outdated and there is a risk of losing financial leadership.

Q: Are you willing to transfer the Libra Association registration to the US?

A: We don't control the Libra Association, so we can't make such a decision. But from Facebook's point of view, we will mainly be active in the United States.