Facebook cryptocurrency chief David Marcus will testify on Tuesday that the company will not launch its “Libra” initiative until it has received approval from U.S. regulators, according to a transcript of his prepared remarks.
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Marcus is set to testify before the Senate Banking Committee on Tuesday to address widespread concerns about Libra, the Facebook-backed cryptocurrency set to launch in 2020. President Trump, Federal Reserve Chairman Jerome Powell and various other officials have expressed concern about risks Libra could pose to the U.S. economy and to consumers.
“The time between now and launch is designed to be an open process and subject to regulatory oversight and review. In fact, I expect that this will be the broadest, most extensive and most careful pre-launch oversight by regulators and central banks in FinTech’s history,” Marcus said in the prepared remarks, adding that “Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals.”
Facebook unveiled plans for the cryptocurrency platform in June and announced the creation of a subsidiary, Calibra, to oversee its interests in Libra. Facebook will not exercise direct control over Libra, which will instead be managed by the independent, Switzerland-based Libra Association. The organization includes several major companies, including Facebook, Visa, PayPal and Uber.
While Facebook has touted Libra as a means of facilitating instant financial transactions without fees for users around the world, the initiative drew immediate, bipartisan pushback. House Financial Services Committee Chair Maxine Waters, D-Calif., called on Facebook to issue a moratorium on Libra’s launch, arguing that the platform “could pose systematic risks that endanger U.S. and global financial stability” if left unregulated.
In his prepared remarks for the Senate Banking Committee, Marcus notes that Calibra, Facebook’s digital wallet for Libra, will comply with existing anti-money laundering and tax regulations.
“Companies offering services on the Libra Blockchain will need to be fully compliant with the laws and regulations in the jurisdictions in which they operate, and that includes the Calibra wallet,” Marcus writes. “One of the reasons that Calibra was established as a Facebook subsidiary was because it will be providing financial services, and it will be regulated accordingly.”
Marcus adds that Facebook expects Swiss authorities to regulate and supervise the Libra Association since the organization is headquartered in Switzerland.
Trump emerged as one of Libra’s harshest critics earlier this month, writing on Twitter that he is “not a fan” of cryptocurrencies and that Facebook would have to apply for a bank charter in order to proceed.
Marcus will testify before the Senate Banking Committee at 10 a.m. ET on Tuesday. He is also scheduled to testify before the House Financial Services Committee later this week.