Highlights from Facebook’s Libra Senate hearing

Facebook will only build its own Calibra cryptocurrency wallet into Messenger and Whatsapp, and will refuse to embed competing wallets, the head of Calibra David Marcus told the Senate Banking Committee today. Calibra will be interoperable so users can send money back and forth with other wallets, and Marcus committed to data portability so users can switch entirely to a competitor. But solely embedding Facebook’s own wallet into its leading messaging apps could give the company a sizable advantage over banks, PayPal, Coinbase, or any other potential wallet developer.

Other highlights from the “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations” hearing included Marcus saying:

  • The US should “absolutely” lead the world in rule-making for cryptocurrencies
  • “Yes” Libra will comply with all US regulations and not launch until the US lawmakers’ concerns have been answered
  • “You will not have to trust Facebook” because it’s only one of 28 current and potentially 100 or more Libra Association members and it won’t have special privileges
  • “Yes I would” accept his compensation from Facebook in the form of Libra as a show of trust in the currency
  • It is “not the intention at all” for Calibra to sell or directly monetize user data directly, though if it offered additional financial services in partnership with other financial organizations it would ask consent to use their data specifically for those purposes.
  • Facebook’s core revenue model around Libra is that more online commerce will lead businesses to spend more on Facebook ads

But Marcus also didn’t clearly answer some critical questions about Libra and Calibra.

Chairman Crapo asked if Facebook would collect data about transactions made with Calibra that are made on Facebook, such as when users buy products from businesses they discover through Facebook. Marcus instead merely noted that Facebook would still let users pay with credit cards and other mediums as well as Calibra. That means that even though Facebook might not know how much money is in someone’s Calibra wallet or their other transactions, it might know how much the paid and for what if that transaction happens over their social networks.

Senator Tillis asked how much Facebook has invested in the formation of Libra. TechCrunch has also asked specifically how much Facebook has invested in the Libra Investment Token that will earn it a share of interest earned from the fiat currencies in the Libra Reserve. Marcus said Facebook and Calibra hadn’t determined exactly how much it would invest in the project. Marcus also didn’t clearly answer Senator Toomey’s question of why they Libra Association is considered a not-for-profit organization if it will pay out interest to members.

The hearing is ongoing and we’ll continue to update this article with more highlights

This post was originally posted at http://feedproxy.google.com/~r/Techcrunch/~3/6_SuFZwJGTM/.

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