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David Marcus, head of the Facebook channel, told US lawmakers that the social media giant plagued by privacy scandals would not have access to personal financial information with its new cryptocurrency.
In a letter dated Monday to the Senate Banking and Banking Committee, answering questions from lawmakers in May, Marcus took a diplomatic tone, recognizing the committee's concerns about data privacy and telling them:
"I want to give you my personal assurance that we are committed to taking the time to do it right."
A similar letter was sent to the House's Financial Services Committee, reported Hill earlier Tuesday.
Marcus stated that the personal data would not be attached to any transaction made on the Libra blockchain.
"Similar to existing and widespread crypto-currencies such as Ethereum and Bitcoin, transactions made directly on the Balance Blockchain are" pseudonymous ", which means that the user's identity is not visible publicly, "he wrote, recalling the promise made by Facebook since unveiled the Balance project last month.
The blockchain addresses in a transaction, a time stamp, and the transaction amount will be public, but any known customer or money laundering (AML) information will need to be stored by the wallet providers.
As a warning, Marcus noted that Libra will be an open-source platform, any third-party developer will be able to create its own digital portfolio.
Marcus explained that these third parties would be responsible for how their Libra portfolios are built. It will be up to them to determine the type of information that they can ask their customers and to comply with the regulations and standards in force in the countries they operate. "
He added:
"Regulators of Calibra and other digital wallet services may ask them to collect information about the identity and activities of their users and to make this information available to law enforcement and regulatory agencies, such as AML, CFT [counter-financing of terrorism]and sanctions. "
In response to questions about the type of consumer financial information already available on Facebook, Marcus wrote that a subsidiary of the social media giant (not related to Libra) stores "non-public personal financial information" , such as payment identification information, in accordance with the rules in force. applicable to transactions, but this information is not used for advertising or personalization purposes.
In addition, since the affiliate Facebook Payments, Inc. processes these transactions, Facebook itself does not have access to any payment identification information, although it collects from others. information related to a transaction, such as the merchant, the amount of the transaction, the date and the time. and the good bought.
Church and State
The Libra association, Facebook's board of directors for its blockchain network, will have even less information than Facebook Payments, Marcus told the senators.
Because the validator nodes or portfolios will process and store transactions, neither Facebook nor Libra will store personal data, he said.
Calibra, a firm created by Facebook to develop an open source portfolio for Libra. Marcus explained that "Calibra will be Facebook's representative within the Association. As a separate and regulated subsidiary of Facebook, Calibra will protect consumer financial data and will not use or share it for advertising targeting purposes. "
As a custodial portfolio, however, Calibra will retain certain consumer financial data.
"Except in limited circumstances, Calibra will not share account information or financial data with Facebook or a third party without the client's consent," wrote Marcus.
Exceptions include data shared with law enforcement or regulators in accordance with AML or FT law, as well as in accordance with the Sanctions Act.
"For example, Calibra's customer account information and financial data will not be used to improve the targeting of ads on Facebook or its family of social media and messaging products," added Marcus.
In response to questions about individual credit ratings, Marcus wrote that "Facebook does not get nor use consumer reports or credit ratings for any reason"
Revealed last month, Facebook's comprehensive plan to create a widespread payment system targeting unbanked people was immediately thwarted by laws and regulations. Lawmakers and other government officials around the world have questioned the project or even called for a moratorium on development.
The US Senate Banking Committee is scheduled to hold a hearing on the project on July 16, with the House Financial Services Committee holding another hearing the next day. Marcus will testify to both.
Marcus said Tuesday in his letter that the company had contacted financial services companies, regulators, central banks, policy makers, heads of Treasury and Finance Ministries and other groups to discuss the project. .
"The Libra Association will work with policymakers and regulators to ensure that this new ecosystem adds value to economies, that consumers are protected, and that the oversight role of government and central banks is appropriate. The Association is fully committed to advancing the global dialogue on how blockchain and cryptoassets should be regulated, "he wrote.
Read the full letter to the Senate Banking Committee here:
2019.07.08 FB Letter to Sen … from on Scribd
David Marcus image via CoinDesk archives
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