NEW YORK/SAN FRANCISCO :
Mark Zuckerberg defended Facebook Inc.’s Libra project ahead of congressional testimony, saying the cryptocurrency won’t be launched without approval from the US government.
In prepared remarks for Wednesday’s hearing, he argued the company is seeking to offer an affordable solution to existing methods of sending money abroad.
“People pay far too high a cost—and have to wait far too long—to send money home to their families," wrote Zuckerberg, chief executive officer of the world’s largest social network. “The current system is failing them."
The House Financial Services Committee hearing is focused on Facebook’s impact on the financial services and housing sectors, so Libra will be a major focus. But there will likely be other questions about privacy, election ads, and Facebook’s targeted-advertising business.
Libra has faced intense criticism from politicians and regulators. When David Marcus, the executive in charge of the project, testified before the same committee in July, one of the main concerns was Facebook’s deep involvement. That perception problem has not been lost on Zuckerberg.
“This is something that needs to get built, but I understand we’re not the ideal messenger right now," he wrote in his testimony. “We’ve faced a lot of issues over the past few years, and I’m sure people wish it was anyone but Facebook putting this idea forward."
If Facebook is prevented from building a new global cryptocurrency, tech companies in other countries like China might step in to take advantage of the opportunity, the CEO warned.
“While we debate these issues, the rest of the world isn’t waiting," he wrote. “If America doesn’t innovate, our financial leadership is not guaranteed."
The Libra Association, the new currency’s governing body, was officially created last week, which means Facebook is now just one of 21 members, each with the same voting control over important decisions. That means Zuckerberg won’t technically be able to make commitments about the currency or its rollout.
“We don’t expect to be leading those efforts going forward," Zuckerberg said in written testimony released Tuesday. “The Libra Association has been created, has a governance structure in place, and will be driving the project from now on."
Still, he stressed that Facebook will not be part of launching the Libra payments system anywhere in the world until US regulators approve. “Last time I testified before Congress I talked about taking a broader view of our responsibility. That includes making sure our services are used for good and preventing harm," he wrote.
Members of the committee will have high expectations for the CEO, whose company is still very much the face of the project. One thing he will be able to discuss is how Facebook plans to integrate the new currency into its existing products, like WhatsApp and Messenger.
“You’ve got a huge wealth of data that they’ve harvested from their users’ activities," Warren Davidson, a Republican from Ohio who is on the committee, said. “Do you now mingle that same database with financial transactions?"