In the hearing, each sentor gets five minutes to ask David Marcus the Libra co-founder questions. It has been quite a grilling for the former PayPal CEO.
Mr Marcus has remained composed throughout and stood up well to some very tough questions.
Nearly all of the senators have asked why this project cant be done with the US dollar. – Marcus has said that Libra should be the world’s currency and that the dollar cannot be used in some jurisdictions. The senators then argued that they could just exchange the dollar in the same way the Libra association are planning. I am thinking yes they are right, but the fact is it has not been done yet. There is now universal USD wallet that can be transferred with no fees to areas where banking is a problem. Libra are working on a solution were bankers failed.
One senator asked: are you taking any steps to make sure Libra doesn’t overtake the dollar?
Marcus said the dollar will make up the largest part of the basket and they will not interfere with the Federal Reserve monetary policy. This for me is a tough question as it is up to the public. If there is a viable more convnient alternative people will use it. Although we will not be able to buy things with Libra at the beginning who is to say companies will not make Libra a form of payment and transfer back to their native currency at a later date.
He was asked how would Libra respond to sanctions?
Marcus said whether Libra launches or doesn’t launch there are other cryptocurrencies in the world. He did go on to mention that they will continue to talk to the G7 and work with governments. Libra does not plan on starting unless they satisfy all the regulations but something tells me that will not happen. They want to be recognised as a payment institution not a security. However Libra will be subject to currency fluctuations. They said that 1,7billion adults remain outside the financial system and Libra can help the unbanked.
Marcus defends the fact Libra is not an ETF. The Senate keeps saying that it will be valued against a few assets just like an ETF. Marcus was adamant that it is not an ETF but a payment mechanism.
Mr Sherman was one of the strongest opponents. Mr Sherman said ” we need Zukerberg here, this is the biggest thing that will happen this century” He then went to call Libra “Zuk Bux”. Sherman was very concerned about Libra and Mark Zuckerberg’s association he said Facebook wants to solve its own problems the fact that Zuckerberg cannot print money. He is now creating a product that will provide privacy to drug dealers, money launderers and traffickers. Sherman believes Libra is an attempt to transfer power to Facebook. Very strong words indeed.