Although Facebook has promised that Libra will not pose a threat to national currencies, the U.S. House doesn't want to take any chances. President Trump said Libra will have "little standing or dependability" and suggested Facebook seek a banking charter if it wants to "become a bank". Mnuchin complimented Facebook for "being very candid with the administration".
He declined to comment on any regulatory timeline for Libra, but said he was "not comfortable today" about digital currency and that Facebook was a "long way away from" securing approval.
But concerns about Libra surfaced immediately.
Cotton argued that Facebook's promise doesn't seem like much of a guarantee stating: "So that doesn't sound like much safe-guard to me, other than a commitment before you come into pressure from Democrats-and just wait until tomorrow when you go before the House Financial Services Committee". Because Libra will be backed by a reserve, and because the group of companies managing it will encourage a competitive system of exchanges, the project leaders say, "anyone with Libra has a high degree of assurance they can sell it for local (sovereign) currency based on an exchange rate".
Indeed, his remarks kicked off the skeptical line of questioning, which focused heavily on Facebook's historical missteps in privacy rather than the specifics of the crypto project itself. "If you think the Democrats in this committee have hounded banks, wait until you see what you're in for over there".
However, Marcus also said that American services that will use the Libra digital currency, including Facebook's own Calibra wallet for the Libra currency, will still be governed by US money transmitting laws. "Because the Association is headquartered in Geneva, it will be supervised by the Swiss Financial Markets Supervisory Authority (FINMA)".
According to his prepared remarks, Marcus will tell lawmakers that the Libra Association will support the monitoring and enforcement of financial crimes like money laundering and terrorism financing by giving law enforcement access to so-called on-chain activity.
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According to The Verge, a US technology news network, the goal of Facebook is to eventually create the first mainstream digital currency "that is as stable as the dollar, can be used to buy nearly anything, and can support an entire range of financial products".
"The US should lead and I want to reaffirm that we chose Switzerland not to evade any responsibilities or oversight but rather because it is a well-established global place with headquarters for the World Health Organisation, the World Trade Organisation and even the Bank of worldwide Settlements", he said. "They've been very effective; there's been a lot of financial innovation".
Marcus, who was president of PayPal from 2012 to 2014, tried to assuage concerns by promising that Facebook will not begin offering Libra until regulatory issues are addressed.
Powell's comments at the time also included the imagining of a return to multiple US currencies and a comparison of bitcoin to gold.
"If powerful platforms are found to use data they amass to get an edge over their competitors, both consumers and the market bear the cost", said Johannes Kleis of BEUC, the European consumer organization in Brussels.
The meat and veggies of the deal says: "A large platform utility may not establish, maintain, or operate a digital asset that is meant to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System".
"It's pretty hard to trust you with a worldwide currency that you are setting up in Switzerland", retorted Senator Brown.