Defending Libra – Mark Zuckerberg Testimony

Dominik Olech
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Zuckerberg’s testimony to the American Congress was a long-awaited event not only for the crypto world but public opinion in general. Finally, Facebook’s CEO appeared in Congress to talk about Libra.

I have already given Libra a lot of space on BlockChain24.co, especially in Weekly Updates. And no wonder, because it is the hottest topic in the industry for the last few months. So I couldn’t miss the chance to talk about past events. For the first time, Facebook’s leader decided to talk about Libra in front of the authorities. Did he manage it well? Let’s take a look at the most critical aspects of his testimony – at least in my opinion.

We’re not the ideal messenger right now,” but…

First things first – during his testimony, Mark Zuckerberg was this same calm yet oddly awkward person like during his previous “governmental performance.” If you believed back then that he was a robot or reptile agent, then your judgment will probably stay the same. But I have to admit that such an attitude serves well to create a higher competitive position vis-à-vis the state power with which he has been confronted.

What was his main line of defense? I would describe it as possing Facebook as “nearly perfect.” Zuckerberg started with admitting that his company isn’t flawless, but soon those words were covered up by arguments about how needed it is to make the world a better place. He also puts attention on equal opportunities for women and minorities in Facebook structures and how it adds system prevents discrimination.

Plenty of other aspects related to that social media platform was raised during the testimony, making it a central topic of the event. It was clear that Congress was talking with the CEO of Facebook, not Libra. But, since we are a cryptocurrency-focused portal, let’s just focus on more “crypto” part of the Zuckerberg’s grilling.

Bringing the money back in the people’s hands

Zuckerberg started his testimony with an already known argument. Lots of people around the world don’t have access to bank accounts – and the banking system itself is obsolete and inefficient. It’s an excellent way to start a talk about every cryptocurrency because that statement is indeed true. And raising this topic provides us with a good position as the savior of the global economy.

Is this a correct approach? Blockchain technology makes it possible to upgrade already existing systems, not to replace them with new ones – and it also might work well on the state level. Anyway, Zuckerberg compares the ideal monetary system with sending messages via text communicators. Again, point for him, because the head of the Libra project – David Marcus was previously responsible for the development of Messenger.

In Libra, we trust?

However, is Facebook reliable enough to be a trustee for our money? According to some congressmen, no, since it can’t even handle the privacy of our data right now. The case of integrating WhatsApp into social media giant structures was brought as an example by congresswoman Nydia Velazquez. Quick reminder: despite previous promises of leaving the WhatsApp database independent from Facebook, it was integrated into it anyway.

Velazquez pointed out that such actions speak for credibility issues that Facebook apparently has. And this is only one case. Zuckerberg’s testifying brings back memories of his previous testimony from 2018. Although he managed to get off the tiger’s back in that particular moment, it left some scars on Facebook’s opinion. The social media giant is not the noble knight for human rights anymore. For many, it is as ruthless corporation as many others.

But Zuckerberg doesn’t seem to realize that. He keeps presenting his company as devoted to its users and advances new arguments of the beneficial character of his works for the world. He also stated that Calibra’s goal is not to create an independent, dominant currency because “Monetary policy is the province of central banks, not Libra.” In fact, proving the compatibility of Facebook goals with the government was a significant element of the testimony.

Fear of missing out

One of the most interesting arguments presented by Zuckerberg was referring to the national spirit of the United States of America. He noticed that the US should support Libra in every possible way since this currency will be mostly backed in the dollar. And America has to act quickly because countries like China are already working on similar solutions to dominate the global market.

I must admit, this is a reasonable way to convince Congress. With international tensions growing around the world, and events like the Hong Kong protest, it’s an excellent move to describe Libra as an advantage for the United States. Zuckerberg said openly:

Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership as well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed. “

By choosing such rhetoric, Facebook’s CEO clearly shows the approach of his company: it’s still devoted to making the world a better place – as long as it will be done under the American leadership. What’s interesting, one of the congressmen resembles Zuckerberg with Donald Trump during the testimony. It makes sense since both gentlemen use China as an argument for their actions. And it is a perfect comment to Zuckerberg’s words.

Abandon the ship!

The last thing from the testimony which stuck in my head refers to Facebook’s responsibility for Libra. Zuckerberg stated many times that Libra won’t be launched without the US regulator approval. When asked what would happen if the stablecoin won’t get such permission, he answered that Facebook would be forced to leave the Libra Association. 

That’s right: captain would simply abandon the ship in case of striking a regulatory iceberg. Facebook is an initiator of the whole project. In popular opinion, Libra was related to it long before the official announcement. And now, in the case of losing a battle with the “USS Regulator,” it would merely withdraw, leaving Libra (and poor David Marcus) on its own.

Such an approach is understandable from the perspective of an economy. Libra Association structure assumes that all contributors are equal, and every one of them is free to leave it. But still, it’s worrying that the (un)official leader would simply retreat.

The game is on

To conclude, it was a compelling testimony. Mark Zuckerberg has decided to face the allegations and answer some questions about Libra. To this day, he seemed aloof to this project. And after the meeting, Zuckerberg still appears to be at least not sure about the chance for success. On the one hand, he tried to match the project into the American dream. On the other, he is ready to leave it if the Libra will prove to be a failure. 

However, Zuckerberg’s doubts testify to one thing: an alleged plot to dominate the global market with Facebook’s stablecoin does not go according to plan. But clearly, he hasn’t said the last word yet – and I will be happy to see how this story will develop in the future.

Image by Aaron-Schwartz / shutterstock.com

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