Mark Zuckerberg will tell Congress on Wednesday he is willing to delay the launch of Facebook’s cryptocurrency venture Libra amid growing pushback from legislators and waning support from companies that initially backed the project.
“I believe this is something that needs to get built, but I understand we’re not the ideal messenger right now,” the Facebook CEO wrote in his prepared statement, released ahead of Wednesday’s hearing in Congress over the launch of the digital coin.
In the statement, Zuckerberg also argued that Libra would improve millions of people’s access to the banking system and that its development would extend America’s financial leadership.
But he said Facebook would not be a part of launching the payments system unless all US regulators approve it, and that the company supports delaying Libra’s launch until US regulatory concerns are addressed.
Facebook announced the launch of the payments system in June 2019 and initially set to roll it out publicly in 2020. Though Libra was developed by Facebook, the company said the digital asset would be based in Switzerland and controlled by the Libra Association, a not-for-profit made up of a collective of international companies.
The plan received swift blowback from legislators in and outside of the United States and in recent weeks, eight of Libra’s original 28 members have withdrawn from the Libra Association, including payment giants like Mastercard, PayPal, Stripe and Visa. Despite these roadblocks, the company is pushing forward with the project.
Several companies signed on to the Libra charter in the Libra Association’s first meeting on Tuesday of last week securing their places as initial members of the Libra council. These members include Lyft, Uber, PayU, Spotify and the cryptocurrency exchange platform Coinbase.
“The association is eager to pursue its mission of building a better payment network, broadening access to essential financial services, and lowering costs for billions of people who need it the most,” Libra said in a statement following the meeting.
As Facebook continues its push, politicians in a number of countries have resisted. The UK and the US have called for hearings to provide more information on the currency and France and Germany issued strong statements in September saying Libra would not be allowed to operate there.
Faced with aggressive opposition in North America and Europe, Facebook could still first turn to other emerging markets to establish Libra before launching it elsewhere, said Florian Glatz, a blockchain expert and co-founder of the German firm Fundament. But once it becomes more established, some of the firms that have dropped out may rejoin the venture.
Libra is facing resistance not only from government entities but from within the blockchain community itself. Thirty different blockchain companies and not-for-profit organizations have announced plans to create their own alternative to the Libra blockchain that is free from the company’s rule.
In his testimony before Congress on Wednesday, Zuckerberg will stress the argument that projects like Libra will strengthen the leadership position of the US.
“While we debate these issues, the rest of the world isn’t waiting,” he said. “China is moving quickly to launch similar ideas in the coming months. Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership as well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed.”
Source: The Guardian