Crypto Community Reaction to Facebook Libra US Congressional Hearings
Facebook Libra discussed by leading blockchain experts in the aftermath of two days of U.S. Congressional hearing...
As countless eyes watched and followed the recent U.S. congressional hearings regarding Facebook-backed cryptocurrency Libra, it was evident that it will not be easy for the social media giant and the Libra Foundation to find a way of convincing the regulators of the merits their product could bring to the world.
David Marcus, head of Facebook’s Calibra wallet that is built on blockchain technology, who has long been a leader in the centralized digital currency space, testified before the Senate Committee on Banking as well as the House Financial Services Committee. When asked challenging questions about Facebook’s plans for its Libra digital currency, Marcus mostly assured the lawmakers that Facebook would not be moving ahead with Libra until all regulators were satisfied with the plan.
In spelling this out, Marcus actually highlighted the difference between the stalled, permissioned digital currency “innovation” that Facebook wants to do and the continuous development and growth of Bitcoin (BTC) over the last decade. The crypto community had met this notion and the hearing in general with mixed reactions.
The U.S. government doesn’t trust Facebook’s Libra
It’s understandable that the government is worried about an international tech conglomerate attempting to issue a fiat-backed digital currency that could theoretically see more use than government-issued fiat currencies. It’s almost as if the U.S. government was trying to take notes from Facebook in the congressional hearing on Libra. Bitcoin and the establishment of nonstate-controlled currencies has been out in the wild and continuing in earnest since 2009; however, it’s only with the supposed entrance of Facebook into this space that the American government has suddenly been forced to quickly get up to speed on the potential behind cryptocurrencies.
It’s still unclear whether Facebook was able to allay any of the government’s fears and the timeline for Facebook’s digital currency is still similarly hazy, given the pushback as well as official government reactions. Facebook’s monolithic nature, especially juxtaposed with recent reported privacy violations that have also warranted congressional hearings, has epitomized the community’s distrust of centralized money. Fred Ersham, a co-founder of the exchange Coinbase, summarized Facebook’s impossible task on Twitter:
“Summary of DC’s reaction to Libra:
Congress: ‘Privacy violations appalling! Collect less user information. We’re not comfortable.’
Treasury: ‘High risk of money laundering! Collect more user information. We’re not comfortable.’”
Facebook has a monumental task to satiate all the seemingly contradictory concerns brought up by Congress. However, Bitcoin and other truly decentralized cryptocurrencies are already moving the needle without permission. In fact, many members of Congress simply took the opportunity to rag on Facebook. In doing so, the politicians revealed that they are generally not industry experts when it comes to crypto. There were, however, several congressional members that had made a point to learn about Bitcoin and decentralization in order to better serve their constituents. For example, when talking about the inevitability of a world built on digital currency, Rep. Patrick McHenry did articulate this view: “The world that Satoshi Nakamoto envisioned and others are building is an unstoppable force. We should not attempt to deter this innovation.”
There are better digital currencies already out there
Lawyer Jake Chervinsky articulately summed up the guarded enthusiasm that cryptocurrency believers felt while listening to Facebook talk about its centralized digital currency to the government in a tweet:
“In a way, we couldn't have asked for a better company to get Congress thinking about these issues. We now have a perfect opening to say: ‘Interested in improving payments infrastructure, but don't trust Facebook? Let us show you the far superior, trust-minimized edition.’”
On the popular podcast “Unchained,” Laura Shin spoke with CoinCenter’s director of research, Peter Van Valkenburg, about the congressional hearing on Libra and concluded similarly, thinking that the hearing did more to educate politicians on decentralization than it did to allay fears about Facebook’s bid to be the new International Monetary Fund. The same way that large conglomerates like Facebook, Telegram, etc. all are inevitably seeking to enter the digital currency space, Bitcoin and decentralized cryptocurrencies are simply trudging along without the ability for anyone to definitively speak to its future in front of Congress the way that