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Facebook’s Head of Blockchain to Testify Before US Congress as Social Media Giant Plots Strategy to Sway Crypto Critics
David Marcus, who steers Facebook’s blockchain and crypto projects as the head of the company’s Calibra subsidiary, says the company’s goal is to eventually shift its upcoming Libra coin into a decentralized, permissionless state – that is, provided the company can successfully navigate regulatory hurdles.
Marcus penned a new blog post to discuss the hectic two weeks since Facebook introduced Calibra, as well as address some of the initial criticisms from the crypto community and lawmakers. Calibra’s first product is Libra, a controversial stablecoin that will be pegged to multiple currencies.
The digital asset is designed to move money across borders as easily as email, and it will launch with access to Facebook’s more than two billion users. Regulators have noted that by leveraging Facebook’s massive social network, Libra has the potential to revolutionize the global financial system.
Marcus says he plans to testify to Congress in the weeks ahead and notes that while Libra isn’t as open as Bitcoin, decentralization is a big part of their project.
“What this means is that no one needs to become a member to access the blockchain, and to build services like wallets, or merchant acceptance.
On decentralization — we totally get the point — fungibility of nodes to ensure they can always be replaced over time is a fundamental principle of blockchains, and that’s why we’re committed to gradually transitioning to a permissionless state in the years to come. But it was important to start with trusted entities that could operate in a regulated environment and with the operational expertise required to ensure the integrity of the network in its foundational stage.”
But integrity is a foundational tenet that Facebook is struggling to earn. In a recent open letter to Marcus, chief executive officer Mark Zuckerberg and chief operating officer Sheryl Sandberg, US House representatives implore the company to halt developments on Libra, pointing out that the tech giant expects to pay fines up to $5 billion to the Federal Trade Commission (FTC), and remains under a consent order from the FTC for deceiving consumers and failing to keep consumer data private.
The Calibra head says the company’s plans to have over 100 members in the Libra Association by launch should alleviate the worries of Facebook skeptics who don’t think it can be trusted with such a project.
Says Marcus,
“Facebook will only be one among over a hundred members of the Libra Association by launch. We will not have any special rights or privileges. Facebook created a subsidiary — Calibra — that will operate a wallet service on top of the Libra Network, and while Facebook, Inc. owns and controls Calibra, it won’t see financial data from Calibra.”
Marcus also notes they won’t have a monopoly on wallet services for Libra.
“Even more importantly, people will have many ways in which to use Libra and access the network. You’ll be able to use a range of custodial and non-custodial wallets that will have full interoperability with one another, meaning you’ll be able to pay and receive payments across wallets from different companies, or use a software wallet you’d operate on your own. Bottom line: You won’t have to trust Facebook to get the benefit of Libra. And Facebook won’t have any special responsibility over the Libra Network.”
Additionally, Marcus addresses Libra’s plan for dealing with lawmakers and regulators who have expressed numerous concerns about the project.
Says Marcus,
“We’re talking about something new, at scale in a very regulated industry, and if this is not done right, it could definitely present systemic risks no one wants. This is why we believe in and are committed to a collaborative process with regulators, central banks, and lawmakers to ensure that Libra helps with the kinds of issues that the existing financial system has been fighting, notably around money laundering, terrorism financing, and more.”