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Calibra President David Marcus, a Facebook affiliate, published his testimony in front of tomorrow's congress and on Wednesday, explaining that the Libra Association would be regulated by the Swiss government from where its headquarters are located. He added that the Libra Association and Facebook's Calibra portfolio intended to comply with all US tax, anti-money laundering and anti-fraud laws.
"TThe Libra Association expects that it will be licensed, regulated and monitored. With its headquarters in Geneva, it will be supervised by the Swiss Financial Market Supervisory Authority (FINMA), "writes Marcus. "We have had preliminary discussions with FINMA and plan to discuss with them an appropriate regulatory framework for the Libra association. The association also intends to register with FinCEN [The U.S. Treasury Department’s Financial Crimes Enforcement Network] as a money services business. "
Marcus will defend Libra before the Senate Banking Committee on July 16 and the House Financial Services Committee on July 17. House subcommittee member Maxine Waters has already sent a letter to Facebook and the Libra Association asking her to suspend development and plans to launch Libra early in 2020 "until the regulators and Congress have an opportunity to look at these issues and act.
The big question is whether Congress is wise enough to understand Libra to the extent that it can regulate it in a consistent way. Facebook CEO Mark Zuckerberg's testimony to Congress last year was widespread among lawmakers who asked unfounded or off-topic questions.
Senator Orin Hatch has infamously asked to know "how to maintain a business model in which users do not pay for your service? Zuckerberg smiled: "Senator, we are showing ads. If this concept holds congressional attention, it is difficult to imagine seizing a semi-decentralized issue. cryptocurrency stablecoin that took us 4000 words to explain correctly, and a video of 6 minutes to summarize.
Attempting to allay one of the main concerns that Libra is trying to replace the dollar or interfere in financial policy, Marcus writes that "The Libra Association, which will manage the reserve, has no intention of competing with sovereign currencies or entering the field of monetary policy. He will work with the Federal Reserve and other central banks to ensure that Libra does not compete with sovereign currencies and does not interfere with monetary policy. Monetary policy properly falls under central banks
Marcus's testimony comes a few days after President Donald Trump tweeted Friday, to condemn Libra, saying that "unregulated cryptographic assets can facilitate illicit behavior, including drug trafficking and other illegal activities. Similarly, Facebook Libra's "virtual currency" will have little impact or reliability. If Facebook and other companies wish to become a bank, they must look for a new bank charter and be subject to all banking regulations, like other banks, national and international. "
TechCrunch asked Facebook for an answer on Friday, which it refused to provide. However, a Facebook spokesman pointed out that the Libra association would not interact with consumers or operate as a bank, and that Libra was meant to complement the existing financial system.
On how Libra will comply with US anti-money laundering and customer knowledge (KYC) laws, Marcus explains that "the Libra Association is also committed to supporting the efforts of regulators, central banks and legislators to ensure that Libya contributes to the fight against money laundering, terrorist financing, etc. Says Marcus. "The Libra Association will also maintain the policies and procedures relating to the AML and the Bank Secrecy Act, the fight against the financing of terrorism, as well as other laws relating to national security, to which members will be required to comply if they choose to provide financial services. on the Balance network "
He argues that "Libya should improve law enforcement, not postpone it", as criminals often resort to cash transactions to avoid law enforcement. "A network that allows for the transfer of more paper-money transactions – where many illicit activities occur – to a digital network with regulated access and exit functions with appropriate associated customer knowledge (KYC) practices. the capacity of law enforcement and regulatory authorities. conduct their own analysis of activities on the chain, will provide an opportunity to increase the effectiveness of the monitoring and enforcement of financial offenses. "
As for Facebook itself, Marcus writes that "The Calibra portfolio will comply with FinCEN rules for its AML / CFT program and the rules defined by the Foreign Assets Control Office (FOCA). . . Similarly, Calibra will comply with the Banking Secrecy Act and will incorporate the KYC and LBC / FT methodologies used around the world. "
Below, you can read Marcus' complete testimony:
For more details on how the Balance works, read our in-depth article on everything you need to know.
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