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Zuckerberg gets grilled, but Libra still has a future says eToro’s Assia

eToro’s reaction to the appearance today by Facebook’s Mark Zuckerberg in front of the US House on Financial Services:

Yoni Assia, CEO and Co-Founder of eToro, comments:

“As anticipated, Mark Zuckerberg’s appearance before the Financial Services Committee provided the opportunity to quiz Facebook’s CEO across a whole range of topics from vaccinations, hate speech, and housing, through to the impact of Libra on the US dollar as a reserve currency.

“When it comes to project Libra the questions largely reflected the concerns that have been shared by many since the publication of the Libra white paper in July, namely that it will fuel criminal or terrorist activities, could undermine sovereign currencies, as well as fears around data privacy.

“As indicated by testimony published by Facebook ahead of the hearing, Zuckerberg repeatedly assured the Committee that Facebook wants to work with regulators and that the company will not be involved in launching Libra anywhere in the world until US regulators approve.

“He also confirmed comments on Sunday by David Marcus, Head of Calibra, that much of the detail around Libra is still up in the air and that there are discussions about whether it could make sense to build a global digital payments system based on individual sovereign currencies, rather than creating a new currency. While this would be a significant departure from the white paper, it would likely ease regulators’ concerns. 

“For a long while I have said that the question is when and how, not if central banks will launch digital currencies – it is inevitable. Whether they will call it crypto is the big question as it is likely to involve permission and government control whereas crypto is permission-less and decentralized. However, the creation of digital currencies by central banks will help legitimize crypto as it will enable conversion between them. We will be watching with interest to see which route Libra pursues. 

I believe that creating a platform for regulated firms like eToro to launch their stablecoins on Libra might be a great way to connect one billion people through a global payment network, without a single issuer.  They could end up supporting multiple tokens backed by multi-currency reserves. Generally speaking, a diversified portfolio is less risky for consumers.

“The very significance of Libra is what makes it such a challenging concept. It offers the potential to create one of the largest financial platforms in the world. It could mean greater financial inclusion and increase access to the digital economy. 

“Today, Zuckerberg stressed that Libra’s goal is to promote financial inclusion. He wants to put power in the people’s hands as he believes that the current system is failing many. He cited the lack of digital financial architecture to support the innovation we need.

“We echo this call for financial innovation and praise Zuckerberg for championing this effort. Inequality is the crucial economic challenge of our time. In 2017, just 1% of the world’s population owned more than half of the wealth. We need to find solutions to empower those with less wealth and access to participate in the economy.

“The merging of blockchain technology, growing support for universal basic income (UBI) and the realization that wealth inequality must be reduced, may finally converge into a new global economic system that would give every individual around the world the financial freedom to pursue their purpose and happiness.

“Libra’s mission echoes that of eToro’s GoodDollar. GoodDollar will launch a decentralised cryptocurrency powered by blockchain technology and based on UBI principles, giving every one of its members daily income to create more inclusive economies and help reduce global wealth inequality. We have a long and ambitious journey ahead, but I am excited to be part of these efforts to champion responsible innovation in order to create a better future for us all.”   

  – Ends –

 

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