Facebook executive David Marcus defended the Libra cryptocurrency ahead of his meeting with the representatives of global bankers in Basel on Monday.
The co-creator said Libra is not going to challenge or undermine the sovereignty enjoyed by nations, adding that the cryptocurrency merely wants to become a “better payment network” and deliver meaningful financial services to people around the world.
Marcus explained that Libra wants to engage with regulators and respond to all their major and minor concerns about their cryptocurrency project. He specifically highlighted one of such issues in his tweet: that of Facebook’s ability to issue new money and, in turn, destabilize the global financial order. Stating that a pool of global currencies will back Libra one-to-one, Marcus said their cryptocurrency would remain within the scope of sovereign nations.
4/ Libra will be backed 1:1 by a basket of strong currencies. This means that for any unit of Libra to exist, there must be the equivalent value in its reserve.
— David Marcus (@davidmarcus) September 16, 2019
“We also believe strong regulatory oversight preventing the Libra Association from deviating from it’s full 1:1 backing commitment is desirable,” Marcus tweeted. We will continue to engage with central Banks, regulators, and lawmakers to ensure we address their concerns through Libra’s design and operations.”
Marcus’ comments appeared after three months of constant setbacks for Libra and its spinoff wallet project Calibra. Shortly after Facebook announced it, Libra came under the scrutiny of governments, regulators, and media. Skeptics looked at it as a corporation’s attempt to become a proxy for central banks.
Facebook’s dented image as a social media giant that invaded users’ privacy to manipulate election results in the US also raised eyebrows. To lawmakers, Libra would have harmed users similarly, by gaining insights into their private financial data. Yves Mersch, an executive board member of the European Central Bank (ECB, went ahead and called Libra “a cartel-like” cryptocurrency.
Another Libra Grilling
Marcus and other representatives of Libra are now to sit before a body of central banks’ representatives, including the Federal Reserve and the ECB. French economist and ECB official Benoît Coeuré, who will head the said meeting, warned that the bar for regulating the Facebook cryptocurrency would be “very high,” repeating “concerns” of global regulators that the cryptocurrency is out to destabilize the financial ecosystem.
The meeting would see Marcus and associates explaining the design and implementation of Libra to central banks’ officials. A hopeful Marcus believes the cryptocurrency’ charter would be cleared following constant engagements with regulators. Excerpts from his statement:
“I’m looking forward to the Libra Association taking on full leadership of the project soon after its charter has been ratified so I can focus on building Calibra.”