Facebook clearly knows how to hedge its bets. Be it conquering the social media ecosystem or riling the entire world about cryptocurrencies with one systematic announcement on its in-house digital asset, Libra.
The Mark Zuckerberg led social media behemoth has promised the cryptocurrency ecosystem that Libra will not be centralized. This was again reiterated by Christina Smedley, the head of Marketing and Blockchain at Facebook, who had pointed out that the multiple partners on Libra’s bandwagon will only provide it with a better support system. According to Smedley,
“The association is going to be responsible for taking the Libra network to a permissionless state, and that would begin within 5 years. Facebook will just be one organization in the association.”
Libra was back in the news this week, and maybe for a cause that is larger than the cryptocurrency market or the company itself. On July 17, David Marcus, the Chief Executive Officer [CEO] of Calibra, will appear in front of the Committee on Financial Service [CFS] to discuss the upcoming cryptocurrency’s impact on investors, consumers and the financial system.
This is the first time that a single representative from the digital asset industry will make its case to the regulatory body and in turn, to the general populous. Many proponents of the space, be it supporters or critics of Libra, have unanimously stated that no matter what happens on Wednesday, Marcus’ attempted pitch to the CFS is a giant gift to the cryptocurrency industry.
Regulatory bodies have always acted as the immovable object to the unstoppable force that is the cryptocurrency market and it is hard to imagine the sectors that David Marcus will have to address during the upcoming meeting. Earlier reports from regulatory bodies had pointed out the areas that Facebook needs to address before it can launch its asset and the Securities and Exchange Commission [SEC] is adamant that each and every box is ticked off.
The Fed claimed that Libra’s launch would inherently propagate the mainstream adoption of cryptocurrencies worldwide and it is easy to see why. Facebook’s 1.26 billion heavy user base is the key driver in Libra’s popularity and statistics have shown that even before the launch, the asset had gotten people in the ecosystem talking.
A recent report by TIE had stated that in the United States, 43.8 percent of the tweets about cryptocurrencies were about Libra while only 39.8 percent were Bitcoin related. Even though this statistic sounds positive, David Marcus will have a mountain to conquer on Wednesday as the major sentiment around Libra was negative. According to TIE:
“While conversations on Libra originally tended to be more positive, today 54.8% of Libra Coin tweets were negative. Libra tweets were most positive in the United Kingdom, but tended to be much less positive in the US and France – countries experiencing regulatory pushback.”
Another key area of interest that the Libra CEO will have to address is the issue of money laundering and the overall control possessed by partners such as Paypal Holdings Inc and Lyft. This was also voiced by Jerome Powell, the Chair of the Federal Reserve who had said:
“It cannot go forward without there being broad satisfaction with the way the company has addressed money-laundering.”
Facebook knows that it is on shaky grounds after the Cambridge Analytica scandal and hence, on Libra, the organization has stated they will work closely with policymakers to adhere to all regulatory frameworks. Even Shapeshift CEO Erik Voorhees had commented:
“Libra has a good chance of helping hundreds of millions of people avoid middlemen fees and increase their wealth and financial sovereignty *relative to the status quo banking system* Humanitarians rejoice.”
Like it was mentioned earlier, many proponents in the space have thrown their weight behind Wednesday’s hearing and David Marcus will be glad that the industry is with him. Anthony Pompliano, the CEO of Morgan Creek Digital Capital had tweeted:
“David Marcus will be the only person in the world to defend digital currencies on Tuesday in front of the most powerful group of lawmakers in history to hold a hearing on this new technology.
One man trying to explain why and how the world is changing.
What a time to be alive.”
Ran Neuner, the host of CNBC’s CryptoTrader also tweeted in support saying:
“Like it or not,this week @facebook is sending @davidmarcus to represent the entire crypto industry in front of congress. Rest assured there will be huge impact on the entire industry, worldwide based on his testimony. @facebook has woken up regulators worldwide. Trade carefully.”
It is still unclear as to whether the hearing will provide a substantial framework for Libra’s launch or if it will take a turn for the worse, but one thing is for sure, July 17 will definitely be a landmark day for the cryptocurrency industry.