Once again, Facebook and its executives find themselves in a battle for the very survival of its Libra stablecoin. While many on Capitol Hill seem to be hell-bent on ensuring that the asset doesn’t get launched, one Congressman is advocating for it massively. Earlier today, Rep. Patrick McHenry, a Republican House of Representatives member from North Carolina, appeared on a segment of CNBC’s Squawk Box segment, where he claimed that by potentially killing Libra in its infancy, American policymakers and regulators could be stifling innovation.
McHenry currently serves as a ranking member on the House Committee on Financial Services. Facebook founder and chief executive Mark Zuckerberg will be sitting before the Committee today to answer questions about the asset. While the sentiment towards the social media giant is not the best, McHenry thinks a negative outing by the company could send a ripple effect on innovation in the cryptocurrency space.
In part, he told CNBC, “Because they’re a big company doing this type of innovation, you have American policymakers trying to pounce on them. This also sends a chilling signal to innovation in the United States.”
Can Zuckerberg rescue Libra?
Admittedly, there isn’t much optimism that Facebook will be able to convince the Financial Services Committee to let Libra see the light of day. Shortly after the company published the whitepaper for Libra on June 16, Rep. Maxine Waters (D-CA), the Chairperson of the Committee, immediately called for the company to pause development on the asset, pending a time when lawmakers would be able to investigate the asset.
NEW: The top lawmakers on the House Financial Services Committee are targeting Facebook’s new cryptocurrency, #Libra.
Chairwoman Maxine Waters says it’s another example of Facebook’s “unchecked expansion,” urges execs to testify and calls on FB to stop working on the currency. pic.twitter.com/xOklWsfLdx
— Brian Fung (@b_fung) June 18, 2019
“Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action,” she wrote at the time.
Eventually, David Marcus, Facebook’s Head of Blockchain and President of the company’s Calibra division, appeared before the Committee in July, hoping to convince its members that Libra wasn’t just safe, but was necessary. Sadly, his best efforts seemed to fall on deaf ears, as lawmakers continued to hammer on the company’s past issues with customer privacy and data management as reasons why no one should even trust Facebook with the finances.
When his hearing was over, everyone knew that Marcus had been thrashed by the Committee. Zuckerberg is now hoping to thrive where his subordinate failed.
Facebook has its work cut out for it
Sadly, however, the prospects for Libra still seem weak, regardless of whether Zuckerberg convinces the House to allow Facebook to continue with its stablecoin. Regulators in Europe are currently mulling over whether to allow Libra in, and Olaf Schulz, the German Vice-Chancellor and Finance Minister, has already sounded off on his disapproval of the asset. To make things worse, India, the country where Facebook has the most customers, has also reportedly claimed that it would be treading with caution as regards whether to give Libra the green light. With all these potential markets being in question, Facebook has an uphill task ahead of it.
However, convincing regulators and lawmakers at home is definitely the first step.
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Author: Jimmy Aki