The Facebook exec in charge of its Libra cryptocurrency effort has sought to assure European governments that their fears are unfounded… by telling them they’re wrong and Facebook knows better.
Co-creator of the program David Marcus took to Twitter this week to address clearly stated concerns from the French and German governments that the proposed cryptocurrency could undermine currency sovereignty.
“Recently there's been a lot of talk about how Libra could threaten the sovereignty of nations when it comes to money,” he noted. “I wanted to take the opportunity to debunk that notion.”
Last week, France’s finance minister Bruno Le Maire gave a speech in which he highlighted the risks posed by Libra, including harder-to-track money laundering and terrorism financing, and urged Facebook to look at creating a separate “public digital currency” instead.
“I want to be very clear,” he told conference attendees. “In these conditions we cannot authorize Libra’s development on European soil.”
That was a clear blow to Facebook’s plans and came just a month after data protection officials from the US, EU and UK issued a joint statement outlining their concerns about Libra. “While Facebook and [its Libra-focused subsidiary] Calibra have made broad public statements about privacy, they have failed to specifically address the information handling practices that will be in place to secure and protect personal information," the statement said in part.
But demonstrating his employer’s trademark humbleness and willingness to listen to constructive criticism, Marcus sought to persuade European governments otherwise: by telling them that Facebook would do a better job at money than the world’s governments.
Better for everyone
“Libra is designed to be a better payment network and system running on top of existing currencies, and delivering meaningful value to consumers all around the world,” he explained. “Libra will be backed 1:1 by a basket of strong currencies. This means that for any unit of Libra to exist, there must be the equivalent value in its reserve.”
Without wanting to tax the European officials’ brains, he then explained what that meant: “As such there's no new money creation, which will strictly remain the province of sovereign Nations.”
He also kindly outlined the sort of regulation that Facebook would be willing to accept in its bid to create a new global currency: “We also believe strong regulatory oversight preventing the Libra Association from deviating from its full 1:1 backing commitment is desirable.”
And he promised to keep helping people who don’t work for Facebook understand why they are wrong: “We will continue to engage with Central Banks, Regulators, and lawmakers to ensure we address their concerns through Libra's design and operations.”
All of which is wonderfully generous of him. But it somewhat overlooks the fact that if you want to launch a currency you need the permission of governments, banks, and regulators, so it’s often best to listen to their concerns and adjust your plans accordingly.
But, hey, maybe being a dick and telling the people that deal with the global economic economy on a day-to-day basis why they’re wrong and don’t understand how things work is just the kind of bold stance Facebook needs right now. It could well cause them to put aside their concerns and green-light the plan from a company whose name has become synonymous with lying and abuse of consumer trust in order to turn a buck. We’re not confident of its success, however.
Adding to the already high levels of confidence people can have in Libra and Facebook, it has also emerged this week that another senior Facebook executive is helping to make Libra a reality: Elliot Schrage.
You may remember Schrage: he was Facebook’s VP of global communications and public policy and resigned last June after he took the blame for a disinformation campaign that was waged against Facebook’s critics carried out through right-wing “opposition research firm” Definers Public Affairs.
Now, you may imagine that someone willing to use Facebook’s financial wealth to secretly undermine anyone that doesn't go along with Facebook’s agenda is not someone you would want to trust with a new cryptocurrency. But you’d be wrong. The fact that he resigned 15 months ago but is still employed on a daily basis by Facebook is a no more than a sign of what a straight-shooter he is and how Facebook has turned over a new leaf.
So if you’re listening, bank regulators and European politicians: quit your worrying and complaining. Facebook remains just as trustworthy and reliable as it always was. ®