Facebook’s Libra Currency Project Gets Unfavorable Views from US Senate

The testimony of David Marcus opened a regulatory can of worms, possibly complicating and extending indefinitely the bid to actually launch Libra.

The testimony of David Marcus, CEO of Calibra, was received coldly by the US Senate, showing a generally negative attitude toward digital assets. The curious thing about the digital asset testimony was the total lack of discussion about Bitcoin (BTC).

Facebook had to clean up its house before setting sights on a new business model, reported the BBC. Despite the Libra Foundation being a new and independent body, the previous behavior of Facebook on gathering and exploiting user data has also tainted the new project.

Senator Sherrod Brown stated it would be “delusional” to believe regular users would trust a Facebook-related entity with their money.

"We'd be crazy to give them a chance to let them experiment with people's bank accounts,” he said.

The unfavorable hearing results, despite the cautious attitude of Marcus, led to a market-wide crash. Previously, the announcement of Libra boosted optimism that crypto assets would quickly gain mainstream adoption. But turning the spotlight on digital coins led to talks about much stricter measures.

Following the discussion, Marcus tweeted a thread promising not to launch Libra until there is regulatory consensus:

https://twitter.com/davidmarcus/status/1151207953405493248

Marcus also mentioned he would be willing to accept a salary wholly in Libra if the asset gets issued.

Since the Libra project will aim to be international, there may be further restrictions on issuing the digital coin, concerning many national financial systems. Libra’s price will be fixed, but also based on a basket of several national currencies.

The remaining concern about Libra is that the blockchain would be verified by multiple entities. However, Facebook will still centrally manage the Calibra wallet, which would be a closed-source product, with an unknown potential to control the holdings of users.

Senator Brown has previously expressed concerns that Facebook’s influence could push businesses to accept Libra and possibly decline other modes of payment.