Facebook uses China to defend Libra
Yesterday, on the 23rd of October, Mark Zuckerberg sat in front of the congress for six hours, testifying in defence of his Libra Project.
He repeatedly tried to distance himself as well as Facebook, saying that the Libra Association is responsible for the Libra Project. However, with Facebook responsible for most of the engineering of the cryptocurrency project, fingers are easy to point to him.
The conversation majorly centred around the regulation and potential negative impacts of the cryptocurrency, to which Zuckerberg had basically two responses: He either avoided responsibility, saying the decisions are not up to him but that of the Association, or talked about China taking the lead in the same sphere, going ahead of the US.
Amidst US-China trade tensions and US’s desire to be ahead of the game every time, bringing the threat of China to the table has the power to turn heads into agreements.
Zuckerberg said that soon after they published their white paper on Libra, China announced its plans to develop a similar project in the coming months.
The use of China’s plans to develop a similar public-private partnership with some of the country’s biggest companies almost came across as a threat to lawmakers, while also signalling the potential impact of the project that needs to be tapped into.
The potential of Libra is not misunderstood. However, the negative impacts it can potentially have, such as promote money laundering, is what needs regulation to be avoided.
Zuckerberg also said he was open to having Libra’s value be partly linked to the dollar, however, he warned that doing so in full would create challenges in its adoption across the globe.
"Libra is going to be backed mostly by dollars and I believe that it will extend America's financial leadership around the world, as well as our democratic values and an oversight.”Mark Zuckerberg
In addition, Zuckerberg reinstated that the Libra project will not be launched without complete U.S. regulatory approval. At this point, it is important to note that the Libra Project and Association are registered in Switzerland and not in the US. When asked whether Zuckerberg would move the headquarters to the US, he said that the decision was not in his hands.
Speaking about the reduced support in the past weeks, Zuckerberg said it was because “it’s a risky project and there’s been a lot of scrutiny.” The Verge previously reported the US senators urged payment providers to reconsider their involvement with Libra, else they could face “high level of scrutiny” on all matters.
Zuckerberg also revealed that the ‘news’ tab on Facebook will be announced this week.