Libra Senate Hearing Day 2: Congress Concludes Libra Is Not A Cryptocurrency
July 17th, 2019
Today’s Libra Senate hearing actually began on a bullish note for bitcoin. According to congressman Patrick McHenry,
“The world that Satoshi Nakamoto…envisioned, and others are building, is an unstoppable force. We should not attempt to deter this innovation,
and governments cannot stop this innovation, and those that have tried already failed.”
The second day of Facebook Libra’s Senate hearing was more focused on the distinction between Libra and a typical cryptocurrency and unlike yesterday, a few congresspersons actually made mention of bitcoin.
As expected, the testimony of Libra’s CEO, David Marcus was particularly made cumbersome with the technical questions and issues raised by the Senators. Although not much was said about the issue, few lawmakers expressed issues from yesterday’s hearing on the accounts of Facebook’s data leakage propensity and privacy policies.
Is Libra A Cryptocurrency?
David Marcus constantly water after each difficult question put to him. With few congresspersons coming to show-off their understanding of a typical cryptocurrency and how Libra’s anatomy goes in a slightly different design, Congressman Gonzalez was the first to press the G-spot. According to Gonzalez, the whole idea behind Libra is great but the idea of central governance makes it different from a typical cryptocurrency. That only begged the question
“Is Libra Decentralized or governed…”
In response to the dilemma, David Marcus swang into action to make it clear that while Libra was meant to be on a permissionless network, there would indeed be some form of centralization due to the presence of a fiat currency reserve for every unit of Libra formed. According to Marcus, this was to ensure that Libra keeps principles to regulations.
Further, when congressman Gonzalez asked about information between Facebook and Libra, David maintained that no financial data of Libra customers would be shared, not even with Facebook.
As the hearing progressed, congressman Hollingsworth decided to spend some 5 minutes in pressing the issue that Mr. Gonzalez earlier addressed. This time, however, Mr. Hollingsworth maintained that Libra, with evident reasons, wasn’t built on a permissionless network. Also, asking how Libra is different from crypto like bitcoin.
David used two approaches to explain this: first, that Libra was a stablecoin backed by the U.S. Dollar and secondly, has a blockchain designed for speed and scale.
Not long after David had to deal with issues of distinguishing between Libra and a typical cryptocurrency, then came a question about whether Libra can be trusted. This time, lawmakers maintained that while Libra was recognized as a subsidiary to Facebook, it was most likely it would share data with Facebook.
Responding to this curiosities, David Marcus assured the Congress that no such thing as data sharing would ever occur between the subsidiary and its parent company, Facebook. Giving reasons why Libra should be trusted, David maintained that they wanted the Calibra association to be successful and are committed to fulfilling every promise made to that respect.
Calibra Depends On Middlemen, It’s Unlike Crypto
Recognizing the impact that bitcoin has made in its decade long existence, congressman Emma, expressed the fears and worries shown by the public as a matter of just how much data Facebook already possess of them. According to Rep. Emma, people are already wary of trusting Facebook with their money.
At the same time, Rep. Emma pointed out to the fact that crypto is originally built for a peer-to-peer model of money transaction which does not necessarily involve any middlemen. However, with bitcoin’s categories of investors which happen to be tech giants heavy on data, Libra does not have many attributes of a cryptocurrency as instead of operating without middlemen, Libra indeed depends on them.
The Currency Supremacy Struggle
In one of the most important aspects of today’s Libra hearing, congressman Green asked a very cogent question. According to him,
“You know there’s a competition for currency supremacy… The dollar is our currency with which we influence the world’s economy…impact. How would Libra impact the dollar? Do we give up our supremacy in exchange for a cryptocurrency?
David Marcus simply answered ” No” and further explained that Libra was not in a currency competition with the U.S. Dollar or any other currencies.