Facebook: Libra and the US Senate
US Senate hearing overview. What was said. What questions were answered. Part 1.
Streamed live on 16th July 2019, the US Senate held a hearing with Facebook’s David Marcus, head of Calibra.
On May 9th, news of Facebook entering into a cryptocurrency-based payment system was reported. US Senators asked Facebook for more information about the system, its access to and use of groups or individual’s data in credit, insurance, employment or housing. Shortly after this information request, Facebook issued a whitepaper, outlining Libra and their plans for future business.
Express over concerns, for customers security, fighting terrorism and data protection all must be heard. Other concerns are but not limited to;
Libra Payment systems management
Libra or Libra association interaction
Consumers protection
Despite many uncertainties, according to the world bank. 1.7 million of the world remain unbanked. Innovative payments could deliver material benefits to provide cheaper and faster payment options. If we are able to help these people, it would indeed be a great cause to aim towards achieving. However, existing laws and regulations regarding big data are also of upmost concern.
When we look at Europe, they have imposed rules and regulations in regards to data collection, brokers, usage and the overall collection process. This entire process needs to be protected and is what we here, aim to also achieve. Regulations should be clear for all, and not affect those who wish to opt out of these collection processes.
What is clear is that America, establishes rules, while also being innovative, helping further increase our strength in the technology industry.
As the next steps are determined, we will be learning more about Facebook’s intentions, and how we can protect but strive to be better.
Questions start and overview; Main points —
US Senator Brown opening statement — Facebook is dangerous
Facebook has 2 aims;
Open up the world and communications
Make money
It’s hard to remember a time where we did not have Facebook. We need to remember that scandal after scandal, Facebook has tried and tested many experiments, with some large consequences. Is this really a company, that we as a people, want to now trust further, with our finances, with our homes and with our pensions.
David Marcus opening;
For most of my life, I have been building products in the aim of improving people’s lives. For many years I have been Paypals president and I have been working for Facebook for 5 years.
Libras offer to the world;
Imagine a daughter who wants to send money home to her mother in another county. Of the 200 USD she sends, 14 USD on average will be taken as fees, delivery time can be days/weeks and then there are many manual needs such as collecting the sent money from the 3rd party shop. Compared to how we transact using many other technologies, surely there is a better option?
Wouldn’t it be easy and better, if we could use our smart phones, to do the same things, faster, safer and cheaper?
Safe, secure, low cost way to move money around the world
When fully formed, 100 companies will make up the Libra association. Facebook will only have 1 vote, and will not be in any position to control the association. There will be no aim to fight or overthrow other sovereign currency.
Calibra wallet
Calibra will be affordable and accessible allowing users to store their asset. Data will not be shared, unless it is needed to comply with regulation or law. This may include identification documents or other means to prove who someone is, to avoid fraud and other security issues.
US Senate Chairman — Mr Crapo
Personal data collection. Calibra wallet data storage.
Will data be shared across the other Facebook platforms, or for other advertising strategy?
David Marcus
No data will be shared, as data will be individually stored within whichever wallet users opt to use. There will be competition from multiple different companies leading to no main party controlling data or affecting security.
Facebook will only be 1 among many with no special privileges.
Senator Brown
Q. What feedback, aside from already well stated negative feedback form political leaders and world leaders, would it take for Facebook to stop making Libra?
David Marcus
A. We will work on regulation until the policy is accepted and made appropriate, before ever launching. Working together to create the framework is exactly why we have started early and openly to agree and understand how we would be able to produce this product that can innovate people’s lives.
Mr Toomey
Is the future goal, of Calibra, to share data, after receiving consent from users, for large financial gain?
David Marcus
This is not the intention at all. Developing and monetizing Calibra will be to encourage and engage in more commerce in small business leading to further services and revenue streams.
For profit vs non profit
Libra is like cash used as a payment instrument. The structure will have some income that is targeted towards operating cost and investing companies. This income is not to be unlimited or to be given back to the investing members. Incentive and business on the network, will be a huge development into helping the platform.
Consumer security — Mr Tester
Q. Bitcoin transactions are final. This included theft, hacking and accidents. In our current banking system, customers can be and are protected against these. How will Libra and Calibra help in regards to fraud and customer aid?
David Marcus
A. Speaking for Calibra wallet. Consumer protection will be offered for account recovery and fraud, in the same way our banks do so today. 24/7 customer support to resolve any issues as such will be carried out.
Capital investment in Libra/Calibra
Mr Tillis
Q. How much will each company including Facebook, invest in this technology and product?
David Marcus
A. Facebook investment: TBC
All investors investments: TBC
