Facebook CEO Mark Zuckerberg has said that the US may lose its financial leadership unless it permits financial technology innovation and supports its proposed cryptocurrency project Libra.
Without mincing words, the American online social media and social networking service company’s CEO warned that cryptocurrency innovation is vital to let US keep its financial leadership.
Testifying before the US House of Representatives Financial Services Committee in the Congress today, the Facebook CEO drove his message clear to the Committee that the unbanked US citizens will immensely benefit from the use of Libra, which at present is facing a host of regulatory headwinds, especially from the US and EU nations. Protecting the Libra project in front of the US Congress, he made his message loud and clear that the US may lose its financial leadership to China unless it permits financial technology innovation and supports its proposed cryptocurrency project Libra. The US is in danger of losing its leadership in the world of finance without advances in the financial technology area. China is already testing its yuan-backed ‘China Coin’ and Libra could become a worthy answer of the US to that. Also, the launch of Libra and the government supporting it would ensure the US remains the leader in the field of digital finance, he said to the Committee.
Ever since Facebook announced in June this year its intention to launch its own cryptocurrency Libra sometime in 2020, it faced several regulatory headwinds from US financial policy makers and regulators. Apart from US, several EU countries have also been openly expressing their concern about the threat the digital currency Libra poses to the financial stability of their countries. Major EU countries such as France and Germany have also publicly criticized the social media giant’s Libra project, saying it posed risks to EU states’ sovereignty.
It is pertinent to note here that the Chinese Central Bank Digital Currency (CBDC), often referred to simply as ‘China Coin’, is fully supported by the Chinese government and pegged to its native currency yuan. Amidst the ongoing US-China trade war, the Chinese CBDC could help dodge the US trade sanctions and even attract numerous investments into the country. Besides, if launched prior to Libra or another digital version of the USD, the Chinese CBDC may help China take another step to turning into the world’s leading economy.
Meanwhile, Facebook and Libra’s supporters say that they wanted to work with the regulators, and will wait for regulatory nod before the launch of the project. In the meantime, the group has forged ahead with setting up the early governance structure and articles of association for the Libra Association, which will manage the digital currency. They say Libra could revolutionize the global payments system, making it easier to send money around the world and potentially benefiting the under-banked.
Meanwhile, well known investor Anthony Pompliano published a quote by Zuckerberg on his Twitter page, saying that the Facebook’s founder had made an excellent point. “If America doesn’t innovate, our financial leadership is not guaranteed.” This is Mark Zuckerberg’s main message to US Congress today. It is a great point, Pomp said.