Everything seems to be going against Facebook’s quest to launch their Libra cryptocurrency, and a Wednesday hearing before the House Financial Services Committee only made matters worse.
Jerome Powell, Chairman of the United States Federal Reserve Bank pinpointedly said that Facebook cannot go ahead with its Libra cryptocurrency project until there is “broad satisfaction with the way the company has addressed money laundering.”
Money laundering, however, is just one of the regulatory concerns that Facebook has to deal with at the moment.
The Fed chair also added ‘data protection and consumer privacy’ as all of those things that Facebook will need to address “very thoroughly and carefully in a deliberate process that will not be a sprint to implementation.”
Reuters even wrote in its coverage that the Fed chair also mentioned that Libra gives rise to financial stability concerns, which has led to U.S Federal Reserve to appoint a tracking group to monitor the development of the cryptocurrency with collaboration from other global central banking authorities.
Undoubtedly, the latest comments by the Fed chair who earlier said that Facebook told them before unveiling Libra, sets up the stage for the real showdown next week.
David Marcus, the man heading Facebook’s Libra effort is set to testify before the Senate Banking Committee on July 16 and the House Financial Services Committee on July 17.
Marcus’ response to an initial request by the U.S Senate Banking Committee was tagged ‘unconvincing’ by Senator Sherrod Brown (D.-OH), ranking member of the committee, meaning that the Facebook staff has a lot of work to do before next week’s showdown.
The outcome of that testimony would likely be the clearest indicator to whether Facebook’s Libra project would eventually hit the market in 2020 as planned by the company.