Facebook Would Pull Out Of the Libra If Consortium Approved it Without Regulatory Requirements: CEO of Facebook, Zuckerberg
by Midhat Ali Shaikh -
06:47 AM Oct 25, 2019
In Washington, Facebook CEO, Mark Zuckerberg said to the regulators that the company would bow out of the Libra Association if the US lawmakers would not give the green signal on regulatory concerns.
On 23rd October, Wednesday, in House Financial Services Committee Hearing, Zuckerberg fielded targeted queries on various controversial issues exploring around the network. Still, Facebook's proposed Libra went on and established the association to continue moving forward. And it was the leading object in agenda.
Plenty of the responses to the questions of regulators revealed Facebook's official position that the project is out of its control now.
Particularly, Zuckerberg repeatedly said he is standing with his commitment to satisfying the lawmakers on their concerns on Libra before its launch. Rep.Bill Huizenga (R-Mich) homes in on the seeming stress between this commitment and the perception that Libra is totally independent of Facebook. Asking:
"You said that you won’t launch without U.S. regulatory approval. What happens if the association decides to launch despite that?”
Zuckerberg responded to the question:
“I believe we would be forced to leave the association.”
He went on saying, "I would hope that [the] association will weigh our recommendation and what we say publicly that we think should happen."
“If we don’t receive the clearances that we feel like we need to move forward and the association chooses to move forward without us then we will be in a position where we will not be a part of the association,” Zuckerberg said.
As apparently, it seems, Facebook would not be the first one to leave the Libra Association. Visa, Mastercard, PayPal, and ePay also backed out of the Libra recently.
When Rep.Ann Wagner (R-Missouri) asked the question why these members pulled out in your opinion, Zuckerberg admitting the fact, replied, " because it's a risky project."
Zuckerberg emphasized that Libra is trying to establish a payment system rather than building a currency. "It is possible that Libra will be pegged to one fiat currency rather than a basket of currencies," said Zuckerberg.
Unknown Use of Calibra Wallets
Also, Zuckerberg promised to resist the unknown usage of the Calibra wallet but did not do so as per the commitment to lawmakers.
Noting that the bill had been passed by the house to ban the shell companies, Rep. Carolyn Maloney (D-N.Y) asked the Zuckerberg:" will you promise to abandon the anonymous use of wallets for Libra?"
Zuckerberg in response to Maloney said:
“We see a range of cryptocurrencies. We are trying to build a safe and secure and regulated alternative. As a big company, we’re not going to do something that’s unregulated or decentralized. We want to get to the same standard on money laundering or CFT [counter-terrorism financing].”
The regulator said, " your answer is unsatisfied."
"I do not believe you can have bravo AML ( anti-money-laundering) practices and anonymous wallet," Maloney said. "I observe it as a new way for the thieves to conceal the laundered (illegal) money. Will you commit to not supporting anonymous wallet? You are thinking to launch a new currency that could potentially be anonymous."
Zuckerberg replied that Facebook subsidiary creating a waller for Libra. And this is going to have strong verification policies. Also, work with all the regulators to make sure that it is meeting with the AML or CFT standards. He added further:
“I can’t speak for the whole association, you have my commitment from Facebook.”
Zuckerberg put a statement in testimony that is submitted to the House Committee before hearing. He said, that Facebook will not be part of the Libra payment system unless it gets regulatory consent from the U.S. regulators.