Facebook believes Switzerland to be the appropriate authority to regulate its Geneva-based cryptocurrency payments system Libra, project head David Marcus will tell a United States Congress hearing.
Marcus also believes that Switzerland’s data protection commissioner should oversee Libra’s stated commitment not to monetise users’ data in the way that Facebook makes profit from selling personal information to advertisers.
Marcus presented a written statement ahead of a hearing held by the US Congress House Financial Services Committee. The hearing was set up partially to address “national security” concerns surrounding Libra.
The Congress committee has expressed reservations about “an entirely new global financial system that is based out of Switzerland and intended to rival US monetary policy and the dollar.” However, in a prepared statement, Marcus said this would not be the case.
The Libra Association was established in Geneva and May and details of its role were set out a month later. It will manage a pool of government-issued currencies, including the US dollar, British pound, euro and Japanese yen, to underpin the value of the Libra “stablecoin”.
Marcus revealed that Libra has already held talks with the Swiss Financial Markets Supervisory Authorityexternal link (FINMA) about supervising the Libra Association. He said that he expects further discussions to set up an “appropriate regulatory framework”, adding that Libra expects to register with the US Financial Crimes Enforcement Networkexternal link (FinCEN) as a “money services business”.
Marcus also sought to assuage Congress fears that Libra could compete with central banks in setting monetary policy.
Facebook’s entrance into the cryptocurrency scene has caused a stir around the world. Some politicians, regulators and central banks have expressed concern about the potential impact of the cryptocurrency on the financial markets. Other sceptics wonder how a company like Facebook, which has been embroiled in data scandals, can set up such a payments system.
But supporters believe that Libra could help bring cryptocurrencies out of the shadows while boosting Switzerland’s credentials as a global hub for digital assets.