David Marcus, Head of Calibra: Libra Won’t Compete with Central Banks

David Marcus, Head of Calibra: Libra Won’t Compete with Central Banks

David Marcus, head of Calibra, attempted to dispel concerns about Libra during Tuesday’s hearing before the US Senate Banking Committee. In the hearing speech, Marcus shed more light on the general direction Libra was taking, regarding its legal status and approach to privacy.

Regarding the potential for Libra to become a private currency and compete with sovereign monetary policy by creating a secondary economy, Marcus stated this will not be the case:

“It [the Libra Association] will work with the Federal Reserve and other central banks to make sure Libra does not compete with sovereign currencies or interfere with monetary policy. Monetary policy is properly the province of central banks.”

The other concern about Libra is that it will honor the Bank Secrecy Act, as well as customer screening (KYC) and anti-money-laundering (AML) procedures. The Libra Association will run under the oversight of Switzerland’s financial regulator, the Financial Market Authority (FINMA).

The Libra Association also plans to register with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), to comply with US-based regulations.

The third chief concern was about user privacy and data gathering, exacerbated by Facebook’s history of gathering data and the Cambridge Analytica scandal. The Calibra entity will not share user data of any kind with the Libra Association members, said Marcus.

“The Association will not separately hold any personal data on people who use the blockchain, no matter how it otherwise could be collected, and will not run any infrastructure. As a result, the Association cannot, and will not, monetize data on the blockchain,” he said.

Presumably, the KYC data will be separate from blockchain usage data, which will only reveal the public addresses and the transaction.

For now, it is still uncertain whether Facebook’s drive to issue a digital asset would have a positive or negative effect on existing digital coins. The chief fears are that there may be even stricter regulations for all types of digital assets. However, the optimistic position is that Libra will help the case for digital assets.