According to its co-creator, Libra does not seek to replace banks or governments in the issuance of money. This instrument could facilitate access to financial services for the unbanked.
Libra’s Co-creator David Marcus appeared at the US Congress to answer some questions about Facebook’s cryptocurrency before senators. According to him, Libra is not a cryptocurrency, it does not intend to control the flow of money from the country or other countries, and it could be an opportunity for the unbanked to have access to financial services.
The last week, 2019, Marcus was questioned by a number of senators about the various implications of Libra. A set of issues, such as privacy, financial scope, as well as the possibility that other development teams create wallets to handle Libra transactions, were addressed.
Marcus highlighted the technical and development work conducted by Facebook:
“We have worked and developed this technology. We have invested in the best talents within the industry and the engineering needed for its development. Then we opened its code. That will help promote its development and the growth of the network during the process.”
One aspect on which Marcus and the Senators insisted several times during the hearing was Libra’s nature: the Facebook project is not a cryptocurrency but it is a means of payment. “Libra is planned to be used as cash, as a payment tool,” Marcus said regarding the subject.
The Facebook executive stressed that Libra does not seek to replace governments and banks in the issuance of money, but it only aims at offering a tool that makes payments easier worldwide.
Marcus believes that with Libra there will be the possibility of achieving an important economic evolution. He explained that unbanked citizens with low-end smartphones will be able to “move from cash economy to digital economy.” With respect to this case, Marcus explained to the congressional senators that Calibra, Facebook’s official wallet for the Libra token, will offer full support to US users, as well as compliance with anti-money laundering (AML) and know-your-customer (KYC) policies.
In addition, when questioned on the subject, although somehow reluctantly, Marcus assured that he would be willing to keep all his wealth in Libra. The executive also explained that the code will be open for the development of other programmers outside of the Libra Association, and that, although WhatsApp and Messenger will not include other predefined wallets beyond Calibra, the Libra Association will be open to allow creating these new types of software.
On the other hand, when questioned/asked/interrogated about the confidence in the value of Libra, comparing its operation with fiduciary money, which is administered by banks, Marcus said that this means of digital payment will be supported by a reserve of different commodities, not as a fraction but as a total value, like a reserve basket.
Finally, he noted that, in the event of a crash similar to those suffered by banks in the United States about ten years ago, they have the necessary permissions and comply with the safeguard policies required to serve US citizens.
By Willmen Blanco
