Libra Hearing Fails to Assuage Senior Lawmakers' Concerns
Following testimony before the United States House of Representatives Financial Services Committee earlier today, lawmakers are still concerned about the possible launch of the Libra stablecoin.
On Oct. 23, legislators heard statements from Facebook CEO Mark Zuckerberg and posed questions covering a variety of topics from Libra to Facebook's data policies and reaction to possible foreign influences on the platform.
Following the hearing, the committee's chair, Maxine Waters, told Cointelegraph, "I don't support Libra at all at this point." Waters added:
"It is not as if I support it if it does this or if it does that. At this point, I am not a supporter of Libra. I don't know what it is. I don't think that it has been adequately explained. [...] I don't think that he [Zuckerberg] should be moving forward with this huge project — this big idea, with all these other concerns that have not really been resolved. So basically, it was recapping that kind of conversation."
Proponents say prohibition could stifle innovation
A number of representatives on the Financial Services Committee stated that not acting fast on Libra could lead to the U.S. being left behind and losing its spot as a global leader in finance and innovation. Rep. Patrick McHenry began his comments by declaring, “Today is a trial on American innovation.”
Specifically, the Facebook founder noted that China was working on a digital version of its national currency that, should it come to fruition before a dollar-backed project like Libra, could threaten the economic and geopolitical position of the U.S., he claimed.
Zuckerberg also said, "The financial industry is stagnant. There is no digital financial architecture to support the innovation that we need. [...] I don’t know if Libra is going to work, but I believe in trying new things.”
In her statements after the hearing, Waters noted that she supports innovation, but first needs to know what the project is and how it operates before the government gives the green light to the Libra Association, which could manage a potentially staggering amount of wealth.
The Department of the Treasury is monitoring Libra
In a separate hearing yesterday, Secretary of the Treasury Steven Mnuchin stated that the Financial Stability Oversight Council (FSOC), which operates under the Treasury's purview, has created a working group to monitor cryptocurrencies and Libra.
Mnuchin added that participant institutions in the Libra Association may be one avenue through which the FSOC regulates the project.