Facebook is the story yet again in the cryptoeconomy this week as project lead David Marcus testified in front of 2 committees: one in the House and one in the Senate.
People have many questions about Libra including from Facebook’s own shareholders and managers, congressmen, the crypto industry, and the public. Facebook’s terrible reputation with data means that Congress is really looking to see if FB is attempting to become a corporate central bank coin issuer or not.
Some Questions From the Hearings
Nikhilesh De of Coindesk live tweeted many of the more interesting questions and exchanges between Marcus and the various congressmen including these, but first a link to the entire thread
Marcus states that
In a question about what Libra is (or will be) and the resulting follow-up of who would be regulating it here in the US, Congressman Patrick McHenry (who is bullish on crypto)
An interesting question about other platforms owned by Facebook
On regulation for Libra and other cryptos
Like many hearings, there was some grandstanding by some on the committee but there were many excellent questions that show they are truly researching and trying to understand both what cryptocurrencies are and what Libra is trying to accomplish.
Industry Reaction to the Hearings
The most comprehensive recap came from one of our best legal experts: Jake Chervinsky. This very long thread is worth an entire read.
Jake’s thoughts can be summed up as
Members understand the technology of cryptocurrencies better now
Most don’t have an opinion on cryptos but they all hate Facebook
Many Congressmen are able to see the differences between Libra & Bitcoin (to Bitcoin’s benefit)
Crypto is for criminals was a popular topic and cryptos will have to continue to take compliance and AML/KYC seriously
On fraud and what he believes to be a big step forward for cryptocurrencies and a good answer on Libra, former Fed cyber crime investigator on digital currencies had this to say as part of a thread
One of the stars of the hearings, Meltem Demirors made some excellent distinctions between Bitcoin and Libra
And Anthony Pompliano of Morgan Creek commenting on how Congressman McHenry is a full on Bitcoin bull after the hearings
Our CNON Take: We thought from the very beginning that Libra would be good for Bitcoin for the following reasons:
Libra is a stablecoin and Bitcoin is not
Libra is centralized and Bitcoin is not
Libra is Proof of Stake and Bitcoin is not (it’s Proof of Work)
Libra will used for payments and Bitcoin is not
Libra is not a real cryptocurrency and Bitcoin is
When people tire of the pretender (Libra), they will want Bitcoin.
But what we did not expect is that the results of this are already starting to form. Due to Congress’ deep dislike for Facebook, they are forcing FB to do all the heavy lifting regulatory wise which looks like it is helping clear the path for Bitcoin.
Thanks to Bitcoin’s decentralized nature, it’s starting to look more attractive to Congressmen who believe that Mark Zuckerberg is not trustworthy with Americans’ information.
Bitcoin can position itself as the more private, more trustless option to Libra and who will be more protective of your data, all things Libra will never be able to do in any form.
What are your initial thoughts on Libra?