What is the relationship between cutting and Libra? Da Yurui’s testimony of Zuckerberg’s hearing
Author: Deep Chain Finance
On Wednesday, US local time, Facebook CEO Zuckerberg is about to testify on Libra's trip to the House Financial Services Committee. Today, his hearing testimony was revealed.
In the testimony, Zuckerberg discusses Libra's vision, compliance issues, and relationships with Facebook. What can be seen is that in the testimony, Zuckerberg used some persuasive techniques, such as playing the Sino-US relationship card and creating the opposite.
In the testimony of Zuckerberg, Shenzhen Securities also invited the academic assistant Zhu Jiaming, one of the first Libra authors in China, Dr. Long Baijun, the financial commentator, and the Institute of Financial Technology of Renmin University of China. Senior researcher Cai Kailong, founder and dean of the CBX Research Institute, Gu Yanxi, and Liu Chang, the founder of Zhimi University, analyzed the industry insiders who have continued to pay attention to and research Libra, and also compiled relevant comments from US lawmakers. I hope that you can analyze and see the "secret" behind Zuckerberg's testimony and see the future development of Libra.
" Zuckerberg testimony essential "
1. The idea behind Libra is that remittances should be as simple and secure as texting.
Libra will be a global payment system backed by sufficient cash reserves and other highly liquid assets. I believe this is something that needs to be built, but I know that we are not the ideal messenger now. In the past few years, we have faced many problems, and I am sure that people want anyone else to come up with this idea, except for Facebook.
2. If the United States does not innovate, our financial leadership cannot be guaranteed.
When we discuss these issues, the rest of the world has not waited. China is moving quickly to launch a similar idea in the coming months. Libra will rely primarily on dollar support, which I believe will expand US financial leadership, as well as our democratic values and global governance. If the United States does not innovate, our financial leadership cannot be guaranteed.
3. Some people believe that we intend to bypass regulatory agencies and regulatory requirements.
We want to be clear: Facebook will not participate in the Libra payment system and will be available anywhere in the world unless approved by all US regulators. We support Libra's postponement until it completely addresses regulatory issues in the United States.
4. We set Calibra as a regulated subsidiary so that there is a clear distinction between Facebook's social data and Calibra's financial data.
Calibra does not share customer account information or financial data with Facebook, except to prevent fraud or criminal activity, when people explicitly choose to share their data, or when we have a legal obligation to do so.
5. Is Libra going to replace sovereign currency and whether private companies should be involved in this innovation?
I want to be clear: this is not an attempt to create a sovereign currency. Just like existing online payment systems, this is a way for people to transfer money.
Libra has no intention of competing with any sovereign currency or entering the monetary policy arena. It will work with the Federal Reserve and other central banks responsible for monetary policy to ensure this. We expect the Libra Association's regulatory framework to ensure that the association does not interfere with monetary policy.
" Da Yurui commented on Zuckerberg's testimony "
1. Cai Kailong: Zuckerberg’s example of China’s digital currency is somewhat far-fetched
The full text of this testimony is mostly within my expectation. Three points were unexpected, and one point was unexpected.
Both Facebook and Zuckerberg emphasize that Libra is a payment function that is part of Inclusive Finance, which allows for lower payment costs and allows more people to enjoy financial payments. This is also one of their grand visions. I believe that once again, Libra's vision can help them to pass through, because their vision is in line with the mainstream society, in line with the common views of the whole world, and why so many people support Facebook.
It is also expected that Facebook should cut its relationship with Libra, because if everyone thinks that Facebook has Libra, or Libra and Facebook are strongly bound, there are many regulatory issues. In particular, the US Congress is very worried about Facebook's personal privacy disclosure and financial monopoly, because they do not want Facebook, a giant company with a world population of 2.7 billion, to be a financial giant.
Therefore, Xiaozha is very clever in the testimony that Facebook may not be the best leader, but also emphasizes Calibra, one of their subsidiaries is a member of Libra, and the future will be led by the Libra Alliance. A public occasion four or five days ago, Xiaozha did not talk about Libra at all, so now he has gradually cut, which is good for both Facebook and Libra.
The third point is to emphasize compliance, which is the biggest problem they are facing now.
Technology, application scenarios, and users are not problems. The biggest problem is compliance. So he puts aside words in the testimony, that is, he will never replace the position of the legal currency, and then emphasize again, and it is the first time, very Formally, Facebook will not join the Libra Alliance without US regulatory approval.
Be very careful to see his words, Facebook will not join, not that Libra will not do. So he still put aside the road, maybe the regulatory disagree, Libra forced to launch, then Facebook will withdraw from the Libra alliance, but he did not say that Libra will not be launched, that is, the difference, if the regulatory disagree, Facebook will not participate.
My previous advice was that Libra could be tested in other countries. Before the US regulation did not agree, it was a way of supervising the sandbox. But now it seems that Facebook is more decisive, which means that he has completely put the initiative in the US for compliance, and if the US does not agree, Facebook will not participate in this project.
For big companies, of course, it is understandable that such a large company is subject to special attention from regulation, and every move will be greatly affected. Therefore, I can understand Facebook's approach, but this is not conducive to Libra's launch.
Maybe it should be suggested by me. Now some small countries, small areas try it first, and then let the supervision slowly see some results. It is better to move forward in the interaction, but it seems that this road has already Was blocked.
One thing that makes me feel very new is that it is interesting to mention that Libra is important to American innovation and that Libra is linked to the dollar's dominance and American values. This is quite new.
I think this is very skillful. In our opinion, this is a skill. In fact, there is not much room to be scrutinized. He said that if Libra is not implemented, it will suppress innovation, and innovation is very important to the United States. Libra's dominance of the US dollar and American values are very important. I agree, but I think it is a bit far-fetched.
He took China as an example. If Libra is not implemented, it will be opposed. Other countries, such as China, will dominate this aspect. It sounds like it can touch Congress and US regulation, because no one wants the hegemony of the future dollar, and Western values will be led by China, which of course touches the pain point of supervision.
However, according to the actual situation, it is not as serious as he imagined. China is going to launch the central bank digital currency, or it is limited to the domestic market. Facebook's Libra company and its scope of use have not reached China. The two systems are parallel and there is not much competition.
That is to say, the digital currency of the People's Bank of China cannot surpass the global payment of the border. Facebook Libra really has a long way to go to China. Domestically it should not be allowed, because Facebook cannot be allowed in China after all. I think this is just a trick used by Xiaozha.
Of course, he also mentioned that other companies are also introducing digital currency, which is not compliant. This actually refers to the USDT stable currency, which is now illegal in the United States, but is also used worldwide, which can be used as an example.
However, he mentioned China, which is purely to take advantage of the bad relationship between China and the United States to touch the US Congress and supervision. This is a technical issue.
2. Long Bailu: The US Congress is a "small episode" to Libra's various voices, which does not affect the overall situation.
Libra fundamentally protects the interests of the traditional legal currency system because it uses French currency (and/or French currency-denominated government bonds) as a reserve pool and is a “pseudo-innovation” based on the traditional legal currency system.
Most people interpret Libra's subversion of the traditional system, so they misread Libra's relationship with the Fed, or misread the relationship between Silicon Valley geeks and Wall Street capital.
Libra fundamentally represents the interests of the traditional legal currency system. At the beginning of the release of Libra's white paper, you may be surprised that there is no traditional bank as a sponsoring member. One guess is that Libra has challenged the interests of traditional commercial banks.
If Libra announces the use of bitcoin or other native digital assets as a reserve, that is the real subversion, but it will be pressed to the ground by the Fed on the first day.
Libra's obstacles in the US Congress can be understood as rationalizing this matter from a legislative perspective, so Facebook needs to communicate and coordinate with the Congress on behalf of the broader interests of all (outside Wall Street).
Congress seems to have a strong influence, but on the one hand the lack of real professionals can effectively stop such projects (for example, the Fed is theoretically responsible to Congress, but Congress has never had enough expertise to effectively hold account of Fed officials. Including the 2008 financial crisis, Bernanke and Paulson lie in the public in order to protect the interests of Wall Street banks, speak contradictory, Congress is not a method, and on the other hand is greatly influenced by lobbying forces.
The biggest lobbying power in the US Congress comes from two industries, military and financial. A few days ago, because members of Congress wrote to VISA/MasterCard to threaten to support Libra, which may trigger the highest standards of regulation for all related businesses, including their traditional payments, the two chose to exit.
But on October 18, Senator Michael Rocks wrote to the Libra node Anchorage to support Libra. Although it seems that Congress is controversial about Libra, the core idea is to figure out how to supervise and balance different stakeholders.
A member of parliament can freely express his opinions or write a letter requesting "prohibition" of many things, but it is a hundred thousand miles away from the documents that truly form legal efficiency. The US Congress is a "small episode" to Libra's various voices, and does not affect the overall situation.
3. Liu Chang used: Libra scared the central banks of all countries.
Zuckerberg stressed that Libra opposes any form of discrimination, but emphasizes that its purpose is to improve the financial status of the United States and to safeguard the values of American democracy. It is impossible to discriminate against other countries and not to discriminate against other values. So, in order to obtain regulatory approval from other countries, is there another set of rhetoric?
This further shows that Facebook's issuance of super-sovereign cryptocurrencies based on private credit is difficult to succeed, and "super-sovereignty" and "compliance" are contrary.
Libra anchors a basket of currencies, rather than anchoring a single currency. But if Libra anchors the dollar, it will not have much impact, and may not be as good as USDT.
However, Libra's achievements in the crypto economy have not been erased. It has scared central banks and accelerated the digital currency process. Shenzhen has also become a central bank digital currency test field. Thanks to Facebook.
4. Gu Yanxi: Libra will definitely launch
The Democrats in the US Congress have a great dislike of Facebook. So these Democrats will do their utmost to stop Facebook from launching this project.
In American society, it is a commercial society, and the US government serves individuals and businesses. In addition, Libra has also shown a high degree of flexibility. They will make various adjustments to advance the project. So I believe this project will definitely be launched.
5. House of Representatives Sylvia Garcia: Will not relax supervision because of China’s “threat”
If Mr. Zuckerberg wants to be king, he can become the king of social networks. But I don't want him to have extra financial data about people, Zuckerberg must address our concerns about the Libra project.
It will not deviate from the regulatory track because of concerns about what China and Russia are currently doing on this issue.
6. Democrat Bill Foster: worried about China’s issuance of central bank digital currency
I think that if an attempt like Libra really comes into play, or if a central bank in another important country issues a legal digital currency, the US has a responsibility to find a way to deal with it.
I think this is a more direct threat because China seems to be launching digital currency in the coming months. Even more unfortunately, there is a huge demand for replacing the US dollar as a global exchange currency standard around the world. For the United States, this will be a tragedy, especially for global currency stability.
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