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David Marcus, the head of Facebook’s Calibra, has said that Facebook will not launch the cryptocurrency Libra until it has fully addressed regulatory concerns. The comments are prepared testimony — which outlines how Facebook believes Libra will be regulated globally — he plans on giving tomorrow.
The testimony comes in response to apprehensions from leading lawmakers, who have called on Facebook to attest about its tactics to offer banking-related services. It also comes just days after President Trump showed that the social media giant may have to be regulated like a bank in order to offer these services. Marcus says that since the Libra Association is based in Switzerland, he expects Switzerland’s financial regulator will regulate the currency. The association is presently in “preliminary discussions” with the Swiss regulator.
There is no charter in place for the Libra Association, which Facebook has formerly said it wants the other members to help design. Without a charter, all discussions are unavoidably primary, and it’s difficult to know how to control something that still doesn’t have rules.
In a statement, Marcus said that when it comes to regulating services that offer Libra, such as Calibra and its digital wallet, US and state regulators will have a role to play. According to him, states will evaluate Calibra as a money transmitter, while the Federal Trade Commission will supervise consumer protections.
There’s been substantial misperception around how Libra will be regulated in the month since it was announced. So far, Facebook is the major company to have been involve in cryptocurrency, and laws intended to defend consumers and nations from its actions could drastically affect how other cryptocurrencies operate.
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