Advocating China's threat theory, Zuckerberg: Libra will expand US financial leadership

Author: 0x29 0x66

Source: block rhythm

Libra has been publishing the White Paper in June. It has been more than four months since the publication of the white paper in June. After the "multiple strikes" of the German, French and French public opposition, the concerns of the regulators, and the withdrawal of the members of the association, everyone is concerned about whether Libra can Smooth progress.

From the dynamics of the four-month project, the Libra team clearly underestimated the pressure from the regulatory level. In order to facilitate Libra, this time, Mark Zuckerberg, the CEO of Fackbook, will personally go to the US Congress to ask questions to try to dispel the regulator's concerns about the cryptocurrency plan. Based on the pre-exposed testimony and the information disclosed at the hearing, we confirmed that Libra will not introduce a payment system until it is approved by US regulators.

This is the second time that Facebook and Libra have been friendly to the regulators, but will regulators buy it?

Hearing site

On the evening of October 23, Beijing time, after a lapse of six months, Zuckerberg once again went to the US Congress to accept the question of Congress. In the testimony disclosed before the hearing, Zuckerberg emphasized that this Facebook-supported encryption The currency Libra "will enhance the financial leadership of the United States and our democratic values ​​and supervision around the world."

After reading the original testimony, we found that Zuckerberg has repeatedly stressed that Libra is committed to improving the financial industry and does not intend to replace sovereign currency. Libra will continue to maintain a smooth dialogue with regulators until the concerns of regulation are eliminated.

"Libra is a global payment system, fully supported by cash and other highly liquid assets." Zuckerberg said in his testimony that "Libra will be mainly supported by the US dollar, which I believe will expand US financial leadership and us. Democratic values ​​and supervision around the world. If the United States does not innovate, our financial leadership is not guaranteed."

He clarified that "Facebook will not launch Libra payment system anywhere in the world before approval by US regulators", "support Libra to postpone the release until it completely resolves US regulatory concerns. " Will replace the sovereign currency, he clearly stated:

"(Libra) is not trying to create a sovereign currency. Like existing online payment systems, it is also a way for people to trade."

At the scene of the hearing, lawmakers sternly questioned Zuckerberg, from Facebook's advertising regulations, to data breaches, to Libra's impact on the dollar. Zuckerberg also responded one by one.

In the inquiry, Zuckerberg confirmed several key points. First, Facebook paid attention to supervision. Zuckerberg said that Libra will not issue until all the regulatory authorities agree. If other Libra members do not agree with regulation, then Facebook will quit the Libra project.

Secondly, Zuckerberg repeatedly mentioned the threat of possible digital currency innovations in other big countries to the United States. He even mentioned Alipay and WeChat payment. On a certain level, Libra is competing with Alipay and WeChat payment.

Finally, he emphasized Libra's support for the international status of the US dollar, which now accounts for 50% of Libra's legal currency basket. Libra's role is to strengthen the international status of the US dollar.

Obviously, after experiencing data breaches, manipulating elections, etc., members of Congress have no longer trusted Facebook, and this mistrust has been passed on to Facebook-led Libra. This makes Libra, which is not smooth, worse.

Ups and downs of four months

Counting this, this is the third hearing of Libra in the US Congress. The four months since Libra was launched, the topic has continued.

On June 18 this year, Facebook launched a cryptocurrency program for several months. In this 29-page white paper, it provides a detailed introduction to the planning, technology and membership of the cryptocurrency stabilization currency Libra, as well as future plans.

With 2.7 billion users, equivalent to more than one-third of the world's Internet giants, the blockchain industry has once again become popular with the "bubble" and "scam" labels.

The financial industry, the Internet industry, the blockchain industry, and even the US president have expressed their opinions from different angles. Forbes Media Chairman Forbes sent a letter to Zuckerberg saying, "It is recommended to support Libra with gold… It has the potential to become one of the world's greatest inventions and eventually "may replace the dollar as a global currency." Wang Xing, founder of Meituan.com, believes that Facebook's strategy of pushing Libra is very clear. Tencent 's comments on Ma Huateng have hit the nail: (Libra) technology is not difficult to mature, mainly depends on regulation.

However, there are also people who are pessimistic about Libra. Amazon’s vice president of payments believes that Facebook’s “steps are too big”. Nobel laureate Joseph Eugene Stiglitz pointed out that only a fool can trust Facebook's Libra. The Doomsday, who has not been optimistic about cryptocurrencies, even claims that Facebook's Libra is a nominal blockchain that is a monopoly scam.

On July 11, US President Trump commented on Libra on Twitter: "Facebook's cryptocurrency Libra has no status or reliability. If Facebook and other companies want to become a bank, they must seek new bank regulations and like others Banks comply with all banking regulations, both domestic and international."

But everyone's more unified view is that Libra can be seen as a sign of the giant's entry, which is a big boost to the cryptocurrency market at that time . Sure enough, four days after Libra's launch, Bitcoin stood for nearly a year and stood up again for $10,000. It has risen to the current highest point of $1.4 million this year, and the total market value of Bitcoin has soared from $160 billion to $228 billion.

But Libra's development is far more difficult than imagined, and similar praises or controversies flocked to Facebook and Libra almost simultaneously. This "ambitious" plan naturally caused concerns among Libra at the national regulatory level.

On July 2, the US House of Representatives Democrats sent a letter to Facebook calling for a moratorium on all Libra development. Members of the European Parliament said that Facebook may become a "shadow bank" and that regulators should be highly vigilant. On July 16th and July 17th, the US Senate Banking, Housing and Urban Affairs Committee and the US House Financial Services Committee discussed Libra's data privacy issues, how Libra operates, and its impact on US investors, consumers, and the US financial system. The issue held two hearings.

In these two hearings, Libra project leader Marcus also sincerely expressed his willingness to embrace supervision and actively cooperate with relevant departments to complete KYC, anti-money laundering and privacy protection, but the attitude of the regulatory authorities is still tough. Compared to technology development and commercial development, seeking to gain regulatory recognition has become one of Libra's important tasks.

However, from the results, Libra hired a number of well-known lobbying companies and a number of experienced lobbyists, but Libra's dialogue with regulators seems to be not going well.

Germany and France first publicly conveyed a negative attitude towards Libra. On September 13, the German and French Finance Ministers issued a joint statement in Helsinki, Finland, reaffirming the importance of monetary sovereignty and opposing Libra's implementation in Europe: "We believe that monetary power belongs to national sovereignty and should not be controlled by private entities." Subsequently, Italy Also joined the German and French camp, ban Libra.

Regulatory opposition began to affect Libra's founding members, and some members began to waver in their work in Libra. On October 5th, Paypal officially withdrew from the Libra Association and became the first giant to leave the Libra Association.

A week later, Visa, eBay, Stripe, Mercado Pago, Mastercard and Booking Holdings announced their withdrawal from Libra . So far, there are only 21 of the 28 giant companies in the Libra Association (excluding Facebook). The centralization of Libra, which was originally criticized by the outside world, is now getting more and more serious.

Libra, which has developed to the present day, is struggling. Governments are still cautious about this cryptocurrency plan that may deeply affect the world. This time, Zuckerberg will go to the hearing, will Libra welcome new changes?

Other giants' bumpy road

Facebook is not the first giant to plan for incoming cryptocurrencies, including companies such as Telegram and Kik have announced cryptocurrency plans.

As early as early last year, Telegram has raised $1.7 billion in Telegram for the Telegram Open Network (TON), with the intention of building a scalable multi-chain blockchain architecture platform that allows users to perform distributed distribution based on the infrastructure provided by TON. application. Although it was "star-born", the Telegram team kept a low profile on the details of the project until the beginning of October this year.

With the openness of the relationship between Telegram and TON, the SEC is also eyeing the project . In October of this year, the SEC announced a temporary restraining order for Telegram Group, which issued unregistered digital tokens in the US and overseas, and its wholly-owned subsidiary TON Issuer.

According to the latest news, the hearing for TON has been postponed from October 24th to February 18th to 19th, 2020. Telegram needs to prove its "Gram" generation to the US Securities and Exchange Commission (SEC) at the hearing. The currency is not a security, and the TON token will not be distributed until the court decides on the case.

Earlier than Telegram was Kik, which had been ICO since February 2017 and successfully raised about $98 million in funding. However, this behavior also caught the attention of the SEC. This financing was identified as Illegal . In order to fight the SFC, Kik has paid millions of dollars and launched a campaign to fight against cryptocurrencies on Twitter.

On October 19 this year, AppRun MediaLab announced the acquisition of the Kik communication platform. After the acquisition, the Kik communication platform will continue to support the Kin transaction.

In addition to the bumps of the Internet giant, the financial giant's way of issuing money is not smooth. In February of this year , JPM Coin, the US financial services organization that introduced the cryptocurrency "JPM Coin" , announced plans to use JPM Coin for real-time transaction settlement between customers of Wholesale Payments (inter-bank or inter-country payments). After half a year has passed, there is no more disclosure about the progress of the plan. Instead, the agency's CEO, Jamie Dimon, has recently expressed a pessimistic attitude towards Libra. According to Bloomberg, Jamie Dimon called Libra "an idea that will never be realized."

Judging from the process of several giants involved in cryptocurrency, the cryptocurrency plan is not going well. Facebook is an example. Because of the number of users who claim to be the "biggest country" in the world, the regulatory layer is bound to take it seriously.

If this time, Facebook can finally reach a consensus with the regulators and effectively promote Libra's landing, it may be the best "fire" for other giants to enter the game.

* Block Rhythm BlockBeats prompts investors to guard against high risk. The opinions mentioned in this article do not constitute any investment advice.