Facebook will only build its own Calibra cryptocurrency wallet into Messenger and WhatsApp, and will refuse to embed competing wallets, the head of Calibra David Marcus told the Senate Banking Committee today. While some, like Senator Brown, blustered that “Facebook is dangerous!,” others surfaced poignant questions about Libra’s risks.
Calibra will be interoperable, so users can send money back and forth with other wallets, and Marcus committed to data portability so users can switch entirely to a competitor. But solely embedding Facebook’s own wallet into its leading messaging apps could give the company a sizable advantage over banks, PayPal, Coinbase or any other potential wallet developer.
Other highlights from the “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations” hearing included Marcus saying:
- The U.S. should “absolutely” lead the world in rule-making for cryptocurrencies
- The Libra Association chose to be headquartered in Switzerland “not to evade any responsibilities of oversight” but since it’s where international financial groups like the Bank for International Settlements, though Calibra will be regulated by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network
- “Yes,” Libra will comply with all U.S. regulations and not launch until the U.S. lawmakers’ concerns have been answered
- “You will not have to trust Facebook” because it’s only one of 28 current and potentially 100 or more Libra Association members and it won’t have special privileges
- “Yes I would” accept compensation from Facebook in the form of Libra as a show of trust in the currency
- It is “not the intention at all” for Calibra to sell or directly monetize user data directly, though if it offered additional financial services in partnership with other financial organizations it would ask consent to use their data specifically for those purposes
- Facebook’s core revenue model around Libra is that more online commerce will lead businesses to spend more on Facebook ads
- When repeatedly asked why Facebook is pushing Libra to happen, Marcus noted that blockchain technology is inevitable and if the U.S. doesn’t lead in building and regulating it, the tech will come from places “out of reach of our national security apparatus,” raising the spectre of China