Cuban and Congress gang up against Libra

Just a few days before the Congressional hearings involving David Marcus, Facebook’s head of the Libra project, Mark Cuban, the billionaire co-host of “Shark Tank”, echoed President Trump’s tweets when he told CNBC that he “wasn’t a big fan” of Libra.

Libra is a gift to despots

There are seemingly quite a few people who agree with Cuban. He referred to the Menlo Park-based social networking company’s foray into distributed ledger tech as a “big mistake.” Most particularly he took aim at what he sees as Libra’s potential to further destabilise unstable economies and political situations worldwide. He said, “Some despot in some African country that gets really upset that they can’t control their currency anymore.” This doesn’t actually make much sense, but these days nobody seems bothered about rational statements.

Yes, Facebook is targeting the 1.7 billion unbanked people worldwide, a factor that David Marcus repeated several times during his first day of giving testimony to US Congress. The Libra Association’s white paper states: “All over the world, people with less money pay more for financial services. Hard-earned income is eroded by fees, from remittances and wire costs to overdraft and ATM charges… When people are asked why they remain on the fringe of the existing financial system, those who remain “unbanked” point to not having sufficient funds, high and unpredictable fees, banks being too far away, and lacking the necessary documentation.”

Cuban takes issue with this: he believes that Libra will unleash “reactionary impacts of extending financial access to the underrepresented.” Presumably he’s referring to that African despot again.

David Marcus is calm and collected

Meanwhile, in Washington, David Marcus looked cool as a cucumber as he took questions from a succession of senators. The primary issues for the lawmakers were those of privacy and trust. Senator Elizabeth Warren, who is crypto-unfriendly, asked about Facebook’s willingness to allow data portability: “If a Facebook user wishes to use a wallet other than Calibra, will you make it easy to allow the export of other data?” Marcus unequivocally replied, “Yes,” although he was noticeably more hesitant to respond so forcefully when asked about Messenger and Whatsapp data. Sen. Warren got her knife in some of the way when she concluded her remarks by saying, “what Facebook’s been really good at is figuring out how to monetize people’s personal data […] I am not reassured by your statement that you can not see any reason right now why there would not be any data sharing between these platforms.”

Nobody hammered bitcoin

On the bright side for crypto enthusiasts, Congress appeared to be very careful not to attack bitcoin. As Coindesk remarks, “Bitcoin was barely mentioned during the two-hour session and most of the lawmakers seemed far less concerned with the technology than with who was planning to leverage it: Facebook.” Indeed, Sen. Pat Toomey (R-Pa.) sounded bullish on blockchain in general, saying, “We shouldn’t prevent what can be a tremendous financial innovation. There is a big potential in blockchain technology.”

How’s the score looking for Facebook’s Libra as the Congressional interrogations resume today? It looks like most news outlets agree that it has the advantage, although they don’t say that in so many words. Congress appears to be more focused on the fact that it is Facebook (and Mark Zuckerberg) who is leading this project than the real potential of Libra. If another company had launched this project, perhaps Congress would be a lot less interested.

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