The Facebook-led Libra Association today responded to various regulatory and privacy concerns raised by the G7 world leaders forum about its planned digital currency, Libra.
The Libra Association generally downplayed the group’s reservations about stablecoins and said it was “pleased” the body seemed optimistic about the future role of these digital currencies.
The G7 group yesterday warned of the “legal, regulatory and oversight challenges and risks” associated with global stablecoins, fiat-denominated assets that have been championed as an end-route around cumbersome cross-border payment services. The group said that stablecoins raised concerns about market integrity, data privacy, and terrorist financing.
The Libra Association, which comprises 21 companies, responded that it was committed to working with regulators and local governments. It added that it would respect the monetary sovereignty of the nations whose currencies will make up the “basket” of currencies backing the libra.
Experience Web 3.0.
Be the first to get Decrypt Members. A new type of account built on blockchain.
The project has recently heaved amid extraordinary criticism from banks, lawmakers and regulators, who have challenged Facebook’s plan to lead the development of a global alternative to fiat currencies. Earlier this month, several key backers dropped out, following hints from Congress that membership of the project would attract scrutiny.
“Libra coins can comfortably coexist alongside central bank-issued digital currencies. China has been successfully innovating in this area with private mobile networks,” the Libra Association argued today, adding that it plans to “apply the protections they provide to the digital world, not disrupt or undermine them.”
The Libra Association also deferred responsibility to the service providers building atop the Libra network. “Much of the work of detecting illicit activity will, appropriately, happen at the service provider level,” it said. “Individuals and entities who hold Libra coin will be responsible for filing their taxes in accordance with local laws.” It added that it would work with banks, and that it would ensure the project sparked only “responsible innovation.”
The points trotted out today echoed comments made by the project’s overseer, David Marcus, in Congress earlier this year, as well as in early interviews following the project’s initial announcement.
But many of these assurances did little to assuage critics then, and it’s unclear whether the latest response will do any better. Facebook CEO Mark Zuckerberg is scheduled to appear before Congress to address the body’s concerns about Libra later this month.