Facebook CEO Mark Zuckerberg testified before the United States House of Representatives Financial Services Committee today regarding the Libra stablecoin project.

Facebook’s Libra vs. China’s digital renminbi

During the much-anticipated hearings before Congress on Oct. 23, lawmakers and the CEO discussed the growing competition with China on the economic and geopolitical stage.

In his prepared statements to the Committee, Zuckerberg stated that the project would ensure that the U.S. stays a financial leader globally:

"China is moving quickly to launch a similar idea in the coming months. We can't sit here and assume that because America is today the leader that it will always get to be the leader if we don't innovate. 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.”

In his questions to Zuckerberg, Representative Patrick McHenry asked about China and the rapid rise of its technology companies. Zuckerberg said, “Today, six out of 10 of the top tech companies are coming out of China and certainly don’t share our values.”

Rep. Andy Barr also discussed the potential threat of China’s digital renminbi and its involvement in the Belt and Road project, an initiative that launched six years ago and is a global development strategy adopted by the Chinese government involving infrastructure development and investments across the globe.

Speaking to the press following the event, Committee Chairwoman Maxine Waters said regarding China:

“I believe that we are big enough, we are strong enough and we are smart enough to meet the needs and to be competitive in the world, we just have to keep going.”

Financial analysts are also concerned about a Chinese digital currency

RBC Capital Markets analysts previously stated that stifling Facebook’s Libra may leave the field open to China’s central bank digital currency (CBDC) to dominate the financial world. A concern that plays into the argument that Libra is the best and perhaps the only tool the U.S. has against that scenario.

RBC claimed at the time that if U.S. regulators were to dismiss Libra and decide not to draft a set of regulations to encourage crypto innovation in the U.S., China's CBDC could become the global digital currency in emerging economies.

Facebook could leave Libra

Cointelegraph just reported that Facebook CEO and founder Mark Zuckerberg stated that Libra’s primary member, being Facebook itself, could withdraw from the Libra Association should it launch without approval from regulators in the United States.