Facebook Libra cryptocurrency will not be launched without the approval of US regulators

The day before the Senate hearing, Mark Zuckerberg published his testimony in which he spoke about his vision of the Facebook Libra project , which provoked a sharp negative reaction from US lawmakers and regulators, CoinDesk reports.

The current financial system does not support innovation

The main point of the testimony of the CEO of Facebook is the assurance that the Libra project will not be implemented until it is fully approved by US national regulators.

In his speech to the Committee on Financial Services of the US House of Representatives, Zuckerberg notes that the Libra project is aimed primarily at attracting 1.7 billion people deprived of the opportunity to use banking services in the financial sector. The global payment system created by Libra will make it easier for people to send money.

“The current system does not meet the needs of people. The financial industry is stagnating; there is no digital financial architecture to support the innovations we need. However, this problem can be solved, and Libra can contribute to this , ”says Zuckerberg.

The head of Facebook noted that his company is not ideal and faces a number of problems. Meanwhile, a delay in the promotion of the Libra project or a similar project may contribute to the loss of US “financial leadership” on the world stage in favor of China.

"China is moving fast, and plans to implement such ideas in the coming months."

As a result of the formation of the governing council of the Libra Association, Facebook has lost the ability to lead the further development of the project, which will be carried out by a collegial body of 21 participants.

Zuckerberg also once again assured that Libra does not aim to compete with national currencies or participate in the formation of monetary policy. These functions are the responsibility of central banks.

“[The Libra Association] will work with the Federal Reserve and other central banks responsible for monetary policy to convince them of this,” he wrote.

At the same time, the head of Facebook insists on the creation of legal regulations prohibiting Libra from interfering in monetary policy. In addition, the development of the payment system will provide a more effective fight against economic crimes, as law enforcement agencies will have full access to the analysis of all transactions on the network and will be able to verify information about customers using Libra.

Recall, the head of Calibra, David Marcus, suggested that it is possible to use a virtual currency based not on an integral currency basket, but based on national money, such as the dollar or the euro.

Publication date 10/24/2019
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