In testimony before the House Financial Services Committee, Facebook CEO Mark Zuckerberg defended his company's proposed virtual currency, "Libra." The Committee also considered several bills related to technology and the financial services industry.
Mr. Zuckerberg emphasized that Facebook would not launch the Libra payment system until it has the support of U.S. regulators. He warned that, while these issues are being "debate[d]," China and other countries are working to launch similar payment systems. He argued that since Libra would be backed by U.S. dollars, it would "extend" U.S. financial leadership. He also addressed several concerns, assuring the legislators that:
a recent white paper co-authored by Facebook (see previous coverage) was intended to start a dialogue with financial experts and regulators, rather than serve as the "final word";
Facebook does not intend to "circumvent" regulators; and
the intended purpose of Libra is to provide for the transfer of money through an online payment system, not to be a replacement for sovereign currency.
Mr. Zuckerberg also affirmed Facebook's commitment to preventing discrimination among Facebook's advertisers. To "combat" discrimination, he stated, Facebook has made specific changes to policies in order to prevent discriminatory advertisement targeting. For example, Facebook banned the use of age, gender or zip codes in housing and credit advertisements.
Committee members at the hearing discussed several bills concerning technology and finance related to issues raised by the testimony. These included:
H.R. Draft "Keep Big Tech Out of Finance Act" would prohibit large platform utilities (i.e., Facebook) from (i) being authorized as, or affiliating with, a U.S. financial institution or (ii) operating a digital asset that is intended to be "widely used" as a method for exchange, pursuant to the Federal Reserve.
H.R. Draft "Stablecoins Are Securities Act of 2019" would make clear that a managed stablecoin is subject to the same securities laws' requirements as other securities that are meant to protect investors, such as disclosure, antifraud and conflicts of interest.
H.R. Draft "Bill to Prohibit the Listing of Certain Securities" would limit issuers of stablecoins access to capital markets prohibiting certain trading on U.S. national securities exchanges.
H.R. Draft "Designing Accounting Safeguards to Help Broaden Oversight and Regulations on Data" would create more "transparency" on how...