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  • Writer's pictureMichael Bacina

Does Zuckerberg's Libra testimony illuminate the way?

Updated: May 2

Mark Zuckerberg's prepared remarks have been released ahead of his upcoming testimony before the US House Financial Services Committee on Wednesday, 23 October 2019 regarding Libra.

As expected, Mr Zuckerberg's testimony largely reiterates the testimony of David Marcus in July 2019. In particular, that:

  1. "Facebook will not be part of launching the Libra payments system anywhere in the world until US regulators approve."

  2. "Payments processed through Facebook’s licensed payments subsidiaries are subject to comprehensive anti-money laundering, counterterrorist financing, and sanctions monitoring that leverage both our automated systems and human review, and we report suspicious payments activity to applicable authorities consistent with our regulatory obligations."

  3. "The Libra Association has no intention of competing with any sovereign currencies or entering the monetary policy arena."

  4. "We set up Calibra as a regulated subsidiary, so that there is clear separation between Facebook’s social data and Calibra’s financial data. Calibra will not share customers’ account information or financial data with Facebook, except to prevent fraud or criminal activity, when people affirmatively choose to share their data, or when we are legally obligated to do so"

Capitalising on members of Congress previously expressed concerns that the Libra Association ought to have been based in the USA, Mr Zuckerberg states that:

While we debate these issues, the rest of the world isn’t waiting. China is moving quickly to launch similar ideas in the coming months. Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership as well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed.

While this could be interpreted by skeptical members of Congress as a more diplomatic way of saying "move fast and break things", the emphasis on innovating ahead of other competitive jurisdictions is likely to resonate.

This third round of hearings follows two prior appearances from David Marcus, and the recent departures of Visa, Mastercard, Paypal, Ebay, Stripe, Booking and Mercado Pago from the Libra Association. It seems likely that some members of Congress with an axe to grind will use the platform to suggest that Libra has failed before it has launched.


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