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US lawmakers have repeatedly lobbied Facebook's top leader to block the development of the Libra cryptocurrency during a controversial hearing on the project on Wednesday.
They did not go far.
David Marcus, CEO of Calibra's Facebook subsidiary, reiterated his promise that Libra would not launch until regulators' concerns were fully taken into account. But it has stopped committing to freeze the technical work on the project, much to the chagrin of members of the House Financial Services Committee.
The chairperson of the commission, the representative Maxine Waters (Calif.), Had previously called for a moratorium. This is one of the first things she mentioned during the hearing, asking Facebook's management:
"Are you going to stop dancing around this issue and get involved here in this committee … to a moratorium until Congress pbades an appropriate legal framework to ensure that Libra and Calibra do what you claim to do?"
Marcus responded with pretty much the same topic he's been using for weeks.
"I agree with you that it must be badyzed and understood before you can start it … and this is my commitment to you. We will take the time to do it right, "he said.
Representative Carolyn Maloney (D-N.Y.) Raised the issue to interview Marcus. He started giving a similar answer to what he had said earlier, but before he could finish, she interrupted him.
"I take it for a no," she says.
Maloney then asked Marcus if he would at least promise to do a small pilot test of Libra, not exceeding one million users and overseen by the Federal Reserve and the Securities and Exchange Commission (SEC), before launching the currency completely. Again, he objected, saying only that he would commit to working with the regulators.
Not that a driver would be his favorite result. "I do not think you need to launch a new currency," Maloney said.
De-platform concerns
As at yesterday's hearing before the Senate Banking and Banking Committee, Wednesday's panel was very varied. Lawmakers questioned Marcus about everything from money laundering to financial stability to whether Libra should be regulated as an exchange-traded fund or a bank.
Representative Brad Sherman (D-Calif.), Perhaps the strongest Congress critic on crypto, suggested that Libra was more dangerous for America than 9/11.
Relatively sober colleagues wondered if the project would become "systemically important", he said, speaking of "too big to fail".
The Republicans on the panel were less hostile but nonetheless asked sharp questions.
Representative Sean Duffy (R.-Wis.), For example, congratulated Marcus on Facebook's innovation but asked if Libra would prohibit controversial speakers such as Milo Yiannopoulos or Louis Farrakhan from using the platform, like Facebook did in its flagship social network.
"Personally, I think we should not be telling people what they can do with their money," said Marcus, adding that such policies would return to the board of the Libra Association consortium.
AOC weighs in
Representative Alexandria Ocasio-Cortez (D-N.Y.), The young legislator known for her sense of social media and her socialist economic stance, has brought an interesting part of monetary history to the discussion.
She suggested that the currency of Libra be a digital version of the script, a type of private money that companies used to pay their employees. (Coal miners and loggers, for example, were paid a fee to buy goods at the company store.)
Marcus, a former PayPal president, said he did not know the term.
Ocasio-Cortez also questioned the governance of this future world currency. "Have the members of the badociation been democratically elected? Who chose them? She asked Marcus.
He replied that membership is open, subject to certain conditions.
"So we are discussing a currency governed by private companies," continued Ocasio-Cortez. "Do you believe that money is a public good? Do you believe that Libra should be a public good?
Marcus replied that "it's not up to me to decide."
The hearing was continuing at 17:30 UTC. After Marcus, a group of expert witnesses, including former chairman of the Commodity Futures Trading Commission, Gary Gensler, is scheduled to appear.
Watch the live stream here:
Nikhilesh De and Anna Baydakova contributed to the report.
Maxine Waters image via the House Financial Services Committee
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