On Wednesday, Facebook chief Mark Zuckerberg opened the door to scale back plans for the company’s digital coin Libra if it cannot win approval as a new currency for global exchanges.
His comments come amid a torrent of criticism on Capitol Hill over the cryptocurrency Facebook is seeking to roll out next year. Zuckerberg told members of the House Financial Service Committee, “We clearly have not locked down exactly how this is going to work yet.”
“The goal of Libra is to build a global payment system rather than a currency,” he added. By the use of individual currencies, Libra could be limited to digital payment systems, he acknowledged a less ambitious plan than forming a new coin linked to a basket of major currencies.
“I personally am much more focused on being able to help innovate and build a global payment system than I am in any specific makeup of what currency or reserve might look like,” he stated.
Libra is supported by an alliance of companies in a nonprofit, Swiss-based association, but some lawmakers are suspicious about the project and want Facebook instead to focus on data privacy.
Repeating his assurance, Zuckerberg said that the digital coin would not launch without full regulatory approvals. Facebook would quit the alliance if it launches prematurely, he added.
Zuckerberg, being asked whether Libra could simply be linked to the US dollar, said that “the community is fairly split on this point.” According to him, it could be far simpler from a regulatory perspective but that “it may be less welcome in other places if it’s only 100 percent based on the dollar.”
Representative Maxine Waters, heading the panel, said at the opening, “It would be beneficial for all if Facebook concentrates on addressing its many existing deficiencies and failures before proceeding any further on the Libra project.”
“No one is above the law including Mark Zuckerberg,” Waters tweeted.
“Facebook has allowed election interference, released private data, violated civil rights laws, among other offenses & now they’re trying to launch a #BigTechTakeover by creating this mysterious #ZuckBuck? Not on my watch!”
Representative Alexandria Ocasio-Cortez said, “In order to make a decision about Libra, we need to kind to dig into your past behavior and Facebook’s behavior with respect to our democracy.”
A more friendly view was given by Republican Representative Patrick McHenry, suggesting the Libra plan should be given the benefit of the doubt given that similar plans are being made in China and elsewhere.
“I have my qualms about Facebook and Libra … but if history has taught us anything, it’s better to be on the side of American innovation,” McHenry said. While interacting, Zuckerberg observed that a major competitive threat is coming from a Chinese public-private partnership and warned of risks if such a system became the global standard.