WASHINGTON — Facebook's CEO will attempt to distance the social media giant from efforts to launch the Libra cryptocurrency, according to prepared testimony Mark Zuckerberg will give to the House Financial Services Committee.
Zuckerberg is expected to tell the panel on Wednesday that Facebook will not be leading the effort moving forward. He will tell lawmakers that the coalition of 21 companies Facebook created to start the project, known as the Libra Association, will take the reins. His prepared testimony was released Tuesday.
"We’re proud to have helped found a 21-member coalition of companies and social impact organizations that have now committed to moving forward with this idea,” Zuckerberg said in the prepared remarks. “Establishing this broad-based coalition is a positive step, and I welcome the conversation that Libra has sparked. But by design, we don’t expect to be leading those efforts going forward. The Libra Association has been created, has a governance structure in place, and will be driving the project from now on."
Zuckerberg’s testimony comes as financial industry leaders, lawmakers and regulators have sounded the alarm on the cryptocurrency plan, raising concerns about Libra’s implications for money laundering and whether it will comply with U.S. regulations.
Treasury Secretary Steven Mnuchin told lawmakers Tuesday that the department has told Facebook that it’s
Zuckerberg will attempt to assure the House committee that Libra will not move forward until U.S. regulators are on board.
"Facebook will not be a part of launching the Libra payments system anywhere in the world unless all US regulators approve it,” Zuckerberg said in the testimony.
With the social media giant under constant heightened scrutiny in Washington, Zuckerberg said in his prepared testimony that he recognizes that Facebook isn’t the “ideal messenger” to be advocating for a new cryptocurrency like Libra.
"We’ve faced a lot of issues over the past few years, and I’m sure people wish it was anyone but Facebook putting this idea forward,” Zuckerberg said.
He said Libra is not intended to replace sovereign currencies.
“There’s the question of whether Libra is intended to replace sovereign currency, and whether it’s appropriate for private companies to be involved in this kind of innovation,” Zuckerberg said. “I want to be clear: this is not an attempt to create a sovereign currency. Like existing online payment systems, it’s a way for people to transfer money.”
Despite the overall bipartisan concerns surround Libra, some have lauded the project's potential for innovation. In his prepared testimony, Zuckerberg warns that the U.S. could fall behind other countries in financial innovation.
“China is moving quickly to launch similar ideas in the coming months,” Zuckerberg said. “Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership as well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed.”
