Transcripts For CSPAN3 Facebooks David Marcus Testifies Before House Financial Services Hearing... 20240714

Investors, and the American Financial system. I will now give an Opening Statement for five minutes. Today we are here for a hearing on its books proposed Digital Currency, libra, and digital wallet, and the impact on consumers, investors, and the Financial System. David marcus, following his testimony, a panel of experts will share their views on this book plans, is there are serious concerns about the creation of a Digital Currency and digital wallet to expand its reach, like mastercard, paypal, visa, uber reggie lyft rideshare, and specify. Is trying to create a new global fund to rival the us dollar this venture is slated to be based in switzerland, which has a history of creating a haven for criminals and shady corporations. This plan includes serious privacy training, and monitoring of policy concerns. With 2 billion users, will have immediate access to these products, but also from consumers, festers, and the global economy. In addition, facebook has proposed government guaranteed securities and holding them in a libra reserve, to be governed by facebook and its partners, and ownership of assets on a massive scale without proper oversight threatens to concentrate government influence in the hands of a few elites. If these plans come to fruition, the company and its partners will hold immense economic power that could destabilize currency in the government, these proposed interests are all the more troubling because facebook has already harmed vast numbers of people on a scale similar to wells fargo, and devastating impact failing to keep your data private, on a scale that mirrors equifax credit facebook remains under a 2011 Consent Order from the federal trade commission, for deceiving consumers and failing to keep consumer data. In the weights of the Cambridge Analytica scandal in which facebook provided 50 million user private data to a political consultant firm, the company will reportedly pay a record 5 billion for data privacy failures, and in addition, facebook has allegedly stored user passwords dated back to 2012, and paid unsuspecting teenagers to download spyware, experienced a hack of 50 million accounts, and experienced a software bug that granted thirdparty access 6. 8 million user folders. Facebook has also been sued by civil Rights Groups for violations of the fair housing act, which amounts to modern day red lighting. Space facebook has also allowed the purchasing of target ads in a campaign to influence the 2016 election. There are also concerns about the lack of diversity in facebooks upper ranks, and fears that if these plans go forward, women and minority owned businesses may be excluded from fully participating. My colleagues and myself wrote to facebook, calling it to cease implementation of these plans until regulators and congress can examine the issues associated with the Large Technology company developing a Digital Currency, to take action, independent Community Bankers of america and other support groups support this step. Facebooks plans also raise larger concerns about technical expansion into Financial Services as it appears to inappropriately mix commerce and banking activities. Today we will discuss a draft bill that would prevent large platform utilities like facebook from becoming financial tuitions, and block them from creating their own currencies. That is only the first step in our oversight and legislative process. I look forward to hearing from our witnesses to the chair now recognizes the Ranking Member of the committee, to speak for five to go the headlines and sift through speculation and hearsay. Here is just one of my favorite headlines, which asks is facebook forming a crypto mafia as Libra Foundation members boost each others business . And must go beyond the hype and ensure that it is not the innovation goes to die. Just because we may not fully understand the technology proposal, it does not mean that we should immediately call for prohibition. Especially when the proposal is just that, a proposal. But lets face it, lets be honest, it is facebook. I am skeptical, we can either make you a political talking point where we can choose to conduct thoughtful governmental oversight. That is my hope for this day, is thoughtful government oversight. Weather facebook is involved or not, changes here, Digital Currencies exist, this technology is real and facebook entering into this new world is just confirmation. It is an enzyme turn government cannot stop those that have tried have already failed. So the question then becomes what are American Automakers going to do meet the challenges . And the opportunities, of this new world. Some politicians want us to live in a permission based society, where you must come to the government and ask for the blessing before you can even begin to think about innovating. Those are the politicians that would rather kill it before it grows. There are others who believe in the vibrancy of american ingenuity, and american innovation. David the off generations of present invaders, through competition and testing, tinkering and iterating, and to be clear, it is not about advocating for a break it and eager it out later approach. But when it comes to finances, we must ensure that consumers and investors are protected. So mr. Marcus, let us get to work and have that conversation. In turn, based off what we learned, determine whether or not the current Regulatory Framework is meeting the demand of new technology. That is why we are here today. I do not have a crystal ball, i have no idea if the room will lead to greater Financial Inclusion or movements costs, families could send money to each other morse cheaply and easily than they do today, or if it is just a ploy to shoot Facebook Twitter mentions through the roof. We will see. I do know this, republicans stand ready to work with innovators to successfully implement Response Technology here domestically lose out to other countries around the world. I asked my colleagues to join together and support innovation, ingenuity, and the entrepreneur spirit that this nation was founded upon. I am grateful for this hearing and i call upon i called upon john waters to start this i would like to balance my time to mr. Hill. This hearing touches on critical jurisdiction within the community, regulation, the use of and trading of crypto currency, and the intersections of Financial Data. We must ensure that we are asking thoughtful questions as we learn about and analyze rapidly emerging trends. As a former community banker, i understand the importance of appropriate regulation and balance to benefit American Consumers. Monikers we must concern ourselves that all companies are in full compliance of the lot. America is involving is evolving into a digital era and we must make sure that we are asking the right questions, trust that you should verify your faxing. Today we have two different panels. I want to welcome mr. David marcus, he has been ceo of culebra, identifies himself as working for facebook. Esther marquez has served as the Vice President for facebook and he has served as president of paypal and other companies. You are written statement will remain part of the record, you will have five minutes to summarize your testimony, have a yellow light that will appear when you have one minute remaining. I will ask at that time that you wrap up your testimony. Mr. Marcus, you are now recognized for five minutes to present your oral testimony. Thank you, chairwoman. For mchenry and members of the community, and the committee, thank you for the opportunity to appear before you today have been an entrepreneur products aimed at improving lives. I became the president of paypal, and moved to facebook to run messenger and block chain efforts. I described the mechanics of libra and today i want to explain why i am optimistic about what libra can offer the world. I want to make it clear that we recognize that we are only at the beginning of this journey. Chairman powell has said publicly that the process for launching libra needs to be patient and thorough, rather than a sprint to implementation. Reinforcing those views at his recent press conference, we strongly agree with them, we will take the time to get this right. We expect the review of libra to be among the most expensive ever, we are fully committed to working with regulators here and around the world. Chairwoman waters, speaking on behalf of facebook, i pledge to you that facebook will not offer the libra Digital Currency until we have fully addressed regulator concerns and received appropriate approvals. I would like to start by sharing the vision for which is intended imagine a daughter that wants to send money home to her mom in another country. Fourteen dollars on average will be lost. Can also take several days or even a week for the mother to receive the money, a delay that can prove disastrous in emergency. Lines may be long, connection points may be high crime areas, but it does not have to be that way you wouldnt it easier and safer if people could securely and inexpensively receive money through smart phones like they do for so many of . That is what is about, developing a safe, secure, low cost way for people to efficiently around the world promise, has founded the independent Libra Association with companies in payment technology, block chain Venture Capital industries, and nonprofits like womens world banking and staff from the Libra Association. We will govern the block Chain Network and establish the rules of the road to prioritize privacy and Consumer Protection, with safeguards in the Libra Network to fight Terrorism Financing and other financial crimes. We expect these safeguards will meet or exceed existing standards and improve the integrity of the Global Financial system. When fully formed, we expect the libra station to include diverse members. Facebook will only have one vote and will not be in a position to control the association. Nor will they spoke or the Libra Association decision themselves to compete with government currency or ontario policy. In fact we will work with the Federal Reserve and other banks to minimize the risk or interference of monitoring policy. Finally i would like to turn to facebooks role in realizing the potential of libra, facebook has established a subsidiary that will offer digital wallets on the ypres networking hearing consumers will be able to say, spend, and send libra right from smart phones. Will benefit from working commerce across the family of apps that it operates, it will be affordable and accessible, safe and secure, with strong safeguards to protect User Accounts and information. We expect that it will be governed by rules, administered financial regulators. The privacy of customers, it will not individual customer limited services such as preventing fraud or complying with the law i am excited about the potential, and i am proud that we have initiated i believe that if america does not lead innovation in Digital Currency and payments, others will, if the country fails to act we could soon see digital told by others with values dramatically different from ours. I believe libra can direct positive change and provide leadership consistent our values, i look forward to answering your questions. Thank you. I recognize myself for five minutes for questions. Mr. Marcus, facebook has 2. 7 billion users who trust you with intimate thoughts, pictures, feelings, ideas, and sensitive information. Yet at every opportunity to demonstrate growth, competence and responsibly, facebook has let us down, as i already noted, is because a long list of scandals including repeated failures to safeguard user data. You said that we dont need to trust facebook because only be one of 100 members in the libra. And they will manage this product. That is not entirely true, is it . The project was facebooks idea, and facebook is spearheading it, and recruiting partners, facebook subsidiaries will provide consumers with a digital wallet to store libra tokens. As i understand it, no member of the association has paid anything toward the project. So my question is, why should we trust facebook to do these activities . Trust is really essential, it is clear we have made mistakes, i believe we are owning these mistakes and working hard that, working hard all fronts. As far as the Libra Association is concerned, the way that this project has been developed, we have invested everything so far, in libra, and we have built code with technology, and we have donated the technology because it is no open source for the world to use and leverage. As a result, we are controlling the code base, by the time we launch, we will be one of 100 members with no special privilege, and as far as the wallet is concerned, i believe the idea here is that one day we will launch and suddenly 2 billion people will arrive on the on the wallet, this is not the approach that we are taking people have to open specific accounts. They will not be able to use facebook, they will have to open new accounts, in order to do that, they will have to upload a government issued id to identify to meet requirements. Mr. Marcus, i can appreciate that you understand the trust problem, given disregard for us law and massive scale, i think Foreign Countries will find it difficult to effectively regulate facebook. We have the authority to regulate you, and yesterday, the swiss regulate said that they have never been contacted by facebook about this project. Your response to requests for a moratorium on your activities by stating that you would continue to work with regulators before going forward, the regulators lack the authority to adequately oversee you, so how can you work with them to resolve concerns . Can you commit to this committee and stop dancing around questions here . Moratorium to ask inappropriate Legal Framework to ensure that you what to do, to serve the public. We are all in support of innovation. It is not ones file versus another. But if you talk to any member on this committee, they will know nothing about libra, they will know nothing about culebra, they will not know anything about how it is organized or the role that facebook is going to play in this Big Association that now has 28 companies and is looking to get 100 companies. And so, despite the fact we all support innovation and we all understand what is important, for our economy to grow, and for development of the future of this country, we need to be on top of and understand something as massive as this project. That does not say that we dont support innovation. With that i will turn it over. Please go right ahead. Chairwoman, i agree with you, that this needs to be analyzed and understood, and the proper oversight needs to be set up, before libra can lunch. This is in the spirit that we release papers early before any lodging, so that we could have the time to engage with the proper regulators and Central Banks, and lawmakers, to ensure that we will get this right, this is my commitment to you, we will take the time to get this right. The gentleman from North Carolina is recognized for five minutes. I read your white paper, i understand the nature of digital ecology and Digital Currency what is a libra . A Digital Currency, a reserve backed Digital Currency. Is that a security . We do not believe it is. Is a commodity . Congressman, based on current us law, i believe it might be a commodity. We see it as a payment tool. Is it in exchange for funding . An Exchange Rate of funds . It is not. It is not any of the above, in any pure form. It is designed to be a payment tool. A payment tool, okay. If it is none of the above in the current regulatory structure, what im really getting at is how do you comply with regulations . The way that we comply with regulations is in a number of ways, first, as far as the law is concerned, it is registered as a Money Services business with the treasury. It is applying for state licenses and will operate the same way that other logs operate. These are active conversations that we are having, notably with the working group of the g7, and the swiss financial regulator. There is tension between the notion of a decentralized currency or something decentralized and ultimately, privacy. And ultimately, Money Laundering. These stand in conflict with one another, very difficult things to resolve. In your white paper, you see after five years there will be a transition point. You will go from a permission based system permission free system. First transition, how do you record sale the need for controls, which allow you to comply with Money Laundering regulations . With the decentralized notion of a fully Digital Currency. Very good question, congressman. The association will have the ability to set the rules when it comes to Money Laundering programs and requirements for the network. What we expect, even when the Network Transitions to permission this without getting lost, the vast majority of validators will likely be the ones providing services or likely larger companies. You are seeing the nature of the wallet, not the nature of the Digital Currency. Going from mission system, to a permission this system, you are saying it is not in that technology, it will be on the nature of the wallet on either side of this . Is on top of this, we will continue to have a program and we will build under supervision. Getting into that question of Money Laundering provisions, is it your view that you will be Like Western Union . Were more like paypal . Where are you going to be more like paypal . It will be more like the paypal type business that operates in the payments space. As far as the Libra Association is concerned, that is a conversation we are having. This is your view, to be a competitor, to another pay groups, venmo and paypal. Yes, we have a number of wallets that are working with us on the network site, that will compete on the wallet side of the network. The will that consumer data be kept separate were part of your deborah Data Collected from consumers . Is this going to be part of your overall knowledge of consumers or separate and distinct separate and distinct. The final question here. Why are you doing this in switzerland . Why not the good old american dollar . It has nothing to do with evading response ability or oversight, the goal of switzerland is to home this in an international place. That is really why. The second, for the same reason we would like for libra to be a digital global currency, as a result to be one unit of Digital Currency for the world, this is why we believe it is the right approach. Missus maloney is also the chair for the sub ready on investor protection, entrepreneurship and Capital Markets, recognize for five minutes. Thank you. As you can see, there are a lot of questions about this project, it is big and very bold. Some would say it is to bold. The chairman of the Federal Reserve was here last week, saying that he thinks it could be a Systemic Risk, the former chairman is going to testify later that he feels it should be covered by the Investment Company act. We house a lot of concerns and a lot of questions, and i take it that it is a note to the chairwomans question about requesting a moratorium on libra until policymakers can figure out how to handle it . Is that a yes or no to her soon . She called for a moratorium. The commitment is that we will not launch until we have addressed all concerns fully. I think that is a no. Okay. Will you commit right here in his hearing room to walk before you run . Will you commit to doing a small Pilot Program for libra first, limited to nothing more than 1 million users, overseen by the Federal Reserve and the fcc, will you commit to that . Congressman, there are steps we have taken, this is the reason why we announced the white paper in the plan instead of launching and then figuring it out after, which is what happens sometimes with technology products. In this very case, we are deliberate about taking the time to get this right. That is seriously, with all due respect, you breached the trust of users over and over again. Last week you are reportedly find 5 million for selling user by that data, without their knowledge or permission. So i would like to ask you again, will you commit to walking before you run . You go ahead and launch libra without a Pilot Program first, there are too many risks. The libra reserve could make it systemic. Too much money could pull out of banks. The risks are very great. I dont think you should launch libra at all, creation of a new currency is a core government function that should be left to accountable institutions that are accountable to the American People. At the very least, you should agree to do this small Pilot Program first, overseen by you and the Federal Reserve, and the fcc. I think that is a modest request. So will you commit right now to doing a small Pilot Program first . Yes or no . Congressman, we will continue to engage with regulators and the working group that is notably looking after the issues that you raised, to ensure that however we launch this, it is responsibly, and with the appropriate oversight, and in a very responsible way. You have my commitment on that. If you will not commit to testing this out as a Pilot Program first, that is a reasonable request. I think that congress should seriously consider stopping this project moving forward. There is a lot of concern about facebook. A lot of people think it has become a powerful monopoly. Now you are telling us that facebook digital wallet, libra will be the only bullet that can be embedded into Facebook Messenger and whats up given how dominant these apps are, i think that raises serious concerns about marcus market concentration and potentially monopoly concerns. Will you commit to allowing third Party Wallets . Mary answer one point about what you said earlier . I just wanted to address it really quickly. The Current System is really not for people, and for many people, others are leading and plowing ahead, would you answer my question . I get to ask the questions. Will you commit to allowing a third party wallet, yes or no . Simple question. Other wallets are going to be interoperable with what we will be integrating. Do you believe in competition and Market Access . If you believed in it, you would allow them to be embedded also, through the third person party. Will you allow it . Missus wagoner is recognized for five minutes. Thank you. I am concerned that a 2020 launch date demonstrates deep insensitivities around how libra could impact us national security, the Global Financial system, the privacy of people across the globe, criminal activity, and International Human rights. I have a number of questions. So im going to move as expeditiously as possible. Are you taking any steps to ensure that the dollar is not overtaken as the leading International Currency that undergirds Global Economic stability . Yes, chris tillman. The first of many steps is that the dollar is most likely going to be the provide dominant part of the reserve. 58 , generally speaking. I dont know what you are number is. First, the dollar will be one of the dominant currencies backing libra. The other part is the engagement that we have with the g7 working group, with the fed and the Financial Stability board, we will continue to work with those organizations. I also worked as the vice Ranking Member of the House Foreign Affairs pretty. I am hoping to understand how the government could effectively sanctions if libra were to take off, north korea uses crypto currency to evade our sanctions all the time. If the deft if the Treasury Department demanded the Libra Association blacklist certain addresses in order to comply with us sanctions, how would libra respond . Congresswoman, i want to make a strong point because it is really import. Whether we launch or not, there will be other networks, there are other networks, there are other crypto currencies. Those are not coming here for you are not suggesting if others make sanctions that it is okay the results . That is not what i am saying. We are engaging with this and the Libra Association will be registered and we will have strong programs, from all wallets operating here in the United States, for full enforcement of sanctions and then some. Libra could have significant geopolitical implications, from a human rights was effective, for instance, it could be banned users could be penalized. How are you approaching establishing appropriate human rights safeguards, as you develop this libra platform . One of the driving forces is Financial Inclusion. We will have the representatives around the table. Specific organizations. You couldnt answer that yesterday, when i asked. Which ones are you working with to direct the potential human rights impact . We have founding members of the Libra Association, and there will be more organizations that have predicated their energy in addressing the very problems that you are raising. I am curious how you think the libra libra platform with interact with the mutations decency asked that prevents Law Enforcement from if libra is being explicitly used to further criminal actions negotiated on Facebook Messenger. Section 230, as i understand it, this is relating to Facebook Technology products and we have the protections of section 230. Criminals use facebook to fund raise, recruit, and connect, facebook moderation does not seem up to the task. Libra could make it even easier for these nefarious actors to move money. How will you be able to address the Digital Black markets that run rampant on the facebook platform . The first way we will do that is ensuring that on the libra wallet, everyone who opens an account has to identify with a government issued id, and we will have a strong identity and a staff team. My time has expired. I have other questions that i will submit to the record. Missus velasquez is recognized for five minutes. Thank you madam chair. We do not want to stifle innovation, but we do have a healthy dose of skepticism. This is not silicon valley. You cannot work out problems as you go. These problems need to be resolved before you launch libra. So for the third time i pose a question to you, will you commit yourself do not want libra before all of the concerns from the Federal Reserve are addressed . Yes or no . Absolutely, congresswoman. I want to reiterate the commitment that this was the spirit in which we announced earlier i just want a yes or no answer. Thank you. Mr. Marcus. Gave the Federal Reserve increased oversight. We do not yet know will what you are. Will you submit to House Oversight . The Libra Association and culebra have no interest in engaging in banking activities. We will be active in the payments space like many other nonbanks are active in the payment space. We will of course comply with all regulations. We want to make sure that companies do not fall into this Regulatory Authority cannot threaten the Financial System. According to the Libra Association white paper, members of the Libra Association will consist of geographically distributed endeavors services. By what criteria were the initial members of the association chosen . Thank you for your question, congresswoman the way that the initial members pointed was the result of a wide outreach, a combination of companies that can accelerate the acceptance and utility of libra. Companies like uber, lyft rideshare, and specify, accelerating the acceptance of libra within current social Networks Like visa and not informing Financial Inclusion and womens world banking. And the Libra Association is starting that phase of welcoming members. I hear you, you want to get up to 100. If a member were to determine that they no longer wish to participate in the association, what is the process for withdrawal . Congresswoman, and this stage, we are in the process, all of us, 28 organizations are in the process of ratifying this charter, as a result of this. As a result of this process, if members do not wish to participate, they can drop out. They will be in process for an ongoing basis do you think it could threaten the value of libra currency . I do not believe that. According to the Libra Association, the Libra Association has a target launch of the first half of 2020. When do you expect things to be finalized . Will the charter be available for review by regulators, lawmakers, and the public . Absolutely, congresswoman this question was passed before. I will give back the balance of my time. Did you commit to the auditorium . Chairwoman, i committed to waiting. I need a yes or no i want to be precise. I committed to waiting for us to have all the appropriate Regulatory Approval and have addressed all concerns. Thank you very much, that is not a commitment i wanted to clarify that. The gentleman from the german is recognized. I wanted to talk about the car business on is, the issuance of remittances. The World Bank Says the single most important challenge is the lack of transparency in costs, the average global cost is about 7 . Tell me, what fee will you be charging for moving money . Congressman, the goal is to charge very little or nothing at all for person to person transaction. We are hoping that we can offer that art of the service for free. He would be charging something . In libra currency, fractional libra currency, there will likely be a small merchant fee that will be very competitive with current these. Said the system, you will earn revenue from advertising as well . No, congressman, no advertising. In these revenue streams, when we start work on them, we havent at all and dont plan to for a number of years. We will likely be offering a range of Financial Services and partnerships with financial petitions and banks. Those businesses are important to countries all over the world. We know it is represented in central america, and mexico, the third are just source of our currency, 20 in honduras, for example. Both sides of the equation would be subject to this . You will not be able to open an account without proper ky seat. One of the shoes in the third world is obviously that they do not have a Stable Currency and there subject to terrible inflation. There was a note that 94 countries representing 40 sin of the world of relation, 16 of world gdp experienced on a regular basis, 10 or more inflation per year, is it your view that libra wallet will have a more stable wallet, more stable value than local currency . The way that we designed reserve, with subject to we are looking to have a stable Digital Currency. A lot of countries are currently receiving income from abroad. They will now receive income from abroad. In a Stable Currency that will retain value. Many of those same third world countries, some are larger than the third world, they have very strict controls on foreign currency, with controls and ports, they do not allow consumers to take action outside of the home currency, they do not allow the home currency to be taken out of the country. How does libra plan to deal with that . We think can address this right away one thing i want to highlight is that any wallet that is built on will be provide value we dont need to be the only viral we do not need to be the only will it. It was an interesting conversation about the exclusivity of libra wallet you have 100 members that are not interested in facebook having any more monopoly than what they have now. You have a visa debit or Credit System available as a what . , we will have a number of other Payment Methods for facebook platforms, and instagram as well, including debit, credit cards, other wallets, and for person to person payments, there will be more. There will be competition even on facebook application. It will be on traditional currencies, the same way that in messenger you can currently use that. Thank you, chair. Mr. Meeks is also the chair for the subcommittee on Consumer Protection and Financial Institutions, recognize for five minutes. Thank you, madam chair. You for your testimony. I can say with confidence that the entire subprime mortgage ecosystem did not set up to bring the Global Financial system to its knees. The genuinely the generally billion minds did not set up trigger a financial crisis that nearly broke the global market. I can also say with confidence that the deregulation did not set out to trigger the savings and loan crisis, but it. Not only that, they all found logic in innovation and expanding access to Financial Services, and arguments we are systemically seeing the heaviest price paid. You may be speaking earnestly when you tell us the lofty goals. Secretary paulson came to us and told us we were within days of a complete shutdown of the Global Financial system. I do not expect you to understand what that was like. But i assure you it was absolutely terrifying and one of why worst moments in congress. I want to remain a Global Leader in Financial Services and regulation. Let us do this, let us assume that facebook manages to get even just 10 of current user base to the Facebook Libra wallet. We would expect to be designated as such. And the fed to create a special Regulatory Oversight for this book, accordingly. Would you agree to this . First of all, i want to recommit. Yes or no, would you agree to this . We have 10 . I only have a small amount of time. I want to answer your question to the best of my ability, commitment. If we have 10 of the user base, 200 Million People using libra wallet, we will be the same size as many other nonbank payment wallets around the world including here in the United States, and another. You are not answering my question. Anyone Holding Money would be considered a bank. An organization that holds deposits and makes deposits is a bank. Similarly, banks in the past did issue their own currency, and they would clear their payments. Finally, some banks are cooperative, therefore, they are both facebook and Libra Organizations failing to establish bank holding companies, we require protection of the Global Financial system from systemic collapse. We will not engage in thinking services. But you are taking peoples money, right . You are Holding Money the same way that you have venmo and paypal, square cash and a number of other payments. You are telling me you are not going to organize this. You did not answer my first question that would put you under the regulations to make sure that there is no Systemic Risk here, because of what you are doing that could bring down the entire federal government, the entire Financial Services industry. Let me ask you one more. In dodd frank, we established a financial regulator, focused specifically on the best interest of consumers. Do you believe that there is Current Authority over both the Libra Organization and the Facebook Libra wallet . Why did you not conclude that . Do you believe in that jurisdiction . We are engaged in conversation with all of these agencies. It is not for me to decide who has appropriate oversight. Why did you include or not include complaints in your prepared testimony . Cumbersome, it is because we are currently engaged with all of these agencies. We will have more complete outreach by the time we are ready for lunch. We are looking to take the time to get this right. Verification. I understand that you are absolutely opposed to oversight, you dont think they should be allowed to designate you. I am not opposed to any regulation. We have had conversations. Thank you very much, we will move on. The next speaker will be recognized for five minutes. Marcus, thank you. He made a statement while ago, that the Current System is not working. That concerns me. I think the Current System is working. It is just not working as efficiently as efficiently as you would like to see it work. The system right now works because it is kind of like traffic control. If you are on a country road and you have five cars engaged in the intersection, it doesnt cost you any time to go through the intersection. The intersection has 30,000 cars going through each day, to protect people, and for safety purposes, to be able to go through in an efficient way. You are talking about the size and scope of many transactions. It costs a little bit of money right now to transfer that money around the world that is because there are safety concerns they are safety and security concerns to be able to do that. I think you are trying to take away some of those costs. We are concerned about the safety and transactional transparency of what is going on here. The system is working, but you would like to improve it. I think that is what you meant to say a while ago. I believe the system is not working for many people right now. I do not believe the reason that people who earn less, who have less pay more is because of the regulation. I believe we can work at a much lower cost. What you just said is that you agree that the system is not working, just not as efficiently as you would like to see it. So something was said a minute ago, you said that you would offer more Financial Services as you go down the road. And you said that you want to offer no Banking Services. So which one is it . Are you going to have deposits down the road that you pay interest on . Will you have lending that you will be doing for customers . What kind of financial or Banking Services are you intending to grow into . If we are to engage in those services, we will partner with existing banks and Financial Institutions, in the same way that others have done it. Who puts the assets in to begin with . Who owns the assets . What do you do with dividends or interest, or any returns on those investments that you make . Who is sharing in the profits . The way that the reserve is built, if consumers buy into libra, the money that they use ends up in the reserve. It is in custody with large banks or potentially a better form of custody even depending on the outcome of some of the conversation that we are having with the working group and the recommendation they will come with. And so, the reserve is always proportional to the number of libra coins in circulation. If the reserve generates a return, it will be used for two different things. Number one, to pay for the association and the operation of the Libra Network. And secondly, to return investments back to the original backers and put a lot of resources to get out and off the ground. As we look at this, if i have a business and im trying to sell to a company in france and i want to use the libra system to facilitate this, i have income the transaction, i have to report that to the irs. Is there a cost to change back from libra to the dollar so i can explain the kind of transaction, the money that i am sending off this transaction . Is there a fee for that . There will probably be a small fee, because there will be agents involved in the process of converting into libra. From the irs and tax standpoint, as far as the collibra wallet is concerned, we will have the proper tools tilt into the product, so that people can work without. The time is up, thank you. The next beeper speaker, mr. Scott is recognize for five minutes. I have been listening very intently to your testimony. There has been a response from several colleague questions here. Keep mentioning your white paper. As a defense to the answer to the questions. I dont want to call attention to the fact that neither your white paper or subsequent Facebook Post offered any concrete details as to how you plan to implement or enforce strong anti Money Laundering, and how you how you plan to know your customer protections, most important, to ensure, that is what almost are concerned about, to ensure the safety of the Financial Systems. So right now, tell us, what specifically, dont say the what, what are you going to as the responsibility of libra to combat anti Money Laundering . How will you protect our Financial System . Could you tell us right now there are guidelines for all members to enforce standards and programs. For every account open, we will make sure there will be very strong programs. Currently, the full responsibility to file suspicious activity reports are on our banks. Or on other Money Service businesses, which lot was uses to investigate and prosecute criminal terrorists. In your july post, you spoke the ability for regulators to duct their own analysis of gene activity feel that this represents a shift away from libras own responsibility to monitor and force customer protections . No, commitment. The reason i wrote this is that the approach that libra is taking is using a block chain, which is additional visibility for Law Enforcement and regulators, compared to the Current System, to conduct their own investigations solely depending upon banks or related entity self reporting. That does not mean that we on collibra lot on the collibra wallet side and other numbers operating on this network will not file suspicious your marketing see as a new entity for Financial Services. And with, it will surely come with new methods of committing financial crimes. Criminals are going to invent ways to work with us and some of new ways may attempt to export how combating down the road, but be able to look around corners, to see what a criminal has in store for us. What do you have to say . I cannot agree more. We can improve on the the term via currency a couple of times, you are using it in the way you were, so i went to wikipedia, a currency without Intrinsic Value that has established is money, fiat money does not have use value, but only because the party agrees to exchange value. We see that people are using crypto currencies with no backing i am curious, why do to have a reserve . It strikes me as you are using a fiat currency to create a yet currency and then to have a reserve of that. The reason we have a reserve is that we believe to create a high quality payment tool, we need that Digital Currency to be very stable. As we have seen with a number of other currencies out there, Digital Currencies, they are volatile, and as a result they are not a good medium of exchange or it is a two . It is a stability issue. If it is stable, its good money, if it is not, it is not. Could stability be influenced by people trusting in the currency . Yes and no in other words, the way that it perfectly into washington with both a yes and a no okay. It strikes me, as banks have tried to get involved in this financial space, often times they are not in that space because they have distrust of Financial Institutions. It doesnt take much time to find well publicized issues in trust, with a number of companies that are involved in collibra. I am not sure that you will be able to address this. Let me get back to the regulatory applications of this, i had the pleasure of the chair of the Capital Markets subcommittee and i am the Ranking Member now on dash. We have been looking at crypto currency assets. I have asked if it is a Security Exchange product, is it fish or foul . It seems more oedipus to me, it involves in different parts. I am curious. Are you able to actually maintain the car and essence of crypto currency assets if you are under all of this regulation . Leave we can, congressman. We believe in order for any form of Digital Currency and payment to reach, it must be regulated regulated. Would you like to see all of the crypto currencies under the same regulation that you are . Or are you trying to carve out a new product . I cannot speak for other assets. Certainly must have thoughts on that. You are looking and seeing that is not for them, otherwise why would you be asking for this Regulatory Burden . We believe that this is a Digital Currency, it compared to others, it serves a different purpose, this is to serve the purpose of payments, as a payment tool. We believe appropriate regular regulation and oversight is required. Are having a talk here, and my friend said you might equivalent of American Express travelers checks. I dont think of it that way they were actually paper. Would purchase them at a bank and put a fiat currency into it. All right. My time has dwindled, i am sorry. We have got a lot. I have one last quick thing. The chair had asserted that you had not been in contact with the swiss, is that true or not . You said earlier that you have we have been in contact, the other agency was a Privacy Agency that we have not reached out to. I will be following off with some statements. From other recognized for five minutes. Help me understand the deal. I have 500. I purchased one token for five bucks. You take that and what do you do with it . The five dollars that you would use to just libra will end up in the reserve. In the current ascot it would mean to me to have dollars would be in the reserve and another two and half dollars would be in the basket. Euro, pound, young, in the reserve. As a result, the reserve is onefor one, your libra unit of value will always be backed by the same value in the reserve at all times. That would guarantee stability and a lack of volatility. That is in a boat, a bank, where . That reserve is in custody of a large bank. This is something we are in discussions with the g7 working to ensure that there is proper Regulatory Oversight, management, and custody. All right, so weve got this medium, this currency called libra. Now it is half here at half there, and i want to, i want to purchase something in paraguay. With dollars it would cost me four dollars, how do i do that . Do i go to collibra . My credit card and they wire four fifths of a token . Congressman you would transfer the money that you wanted to transfer to another country. It would work the same way you use venmo or paypal. So it is a wiring system more or less . Except i am using libra. Collibra is a wiring system . I venmo my daughter. I send her 20. It is wired money. I couldve gone to the bank in the could have wired it to her, but i used venmo. It is very similar to your expense on venmo. We are struggling with what you are. You are a medium, an intermediary, facilitating financial transactions. It is not as if we have not had problems with that in the history of the world. You have a Money Changer in the process, turning my dollar into a libra euro, that is biblical. The transaction is something that we have had from the beginning of time but it is a faster and more immediate process, and transaction. Am i mistaken enough . It is much lower cost for the end of meeting most. And i appreciate that. But for us, we have seen banks fail. You know . We have seen what is good for gm is good for. They have to go to chapter 11 back in the recession. I dont think that will go to whoever is backing up process. It is certainly possible, our response ability is to people who buy these tokens or use your credit card system. So we are trying to figure out what kind of regulations, i think youre getting really good lessons from both sides of the aisle because we all have the same questions for you, that is the resistance that you are feeling, because we think you are a bank, but you are not quite a bank. If you are a bank, we regulate you because we have seen a lot of people lose money, where there has not been regulation. That is the resistance that i feel, i want to support your innovation and the efficiency that you believe you are bringing to the table, but i also dont want anybody getting hurt here. We are completely aligned on that, we dont want her and we want the proper Regulatory Oversight. And this is what we have announced our plan very early, we are here engaging with regulatory bodies around the world to make sure we have the right inventory framework and oversight, to address all of the concerns that were raised today, yesterday, and were raised by the chairman. Thank you for your testimony. The gentleman from wisconsin. This is absolutely brilliant. Innovative and creative to come from facebook to leverage a network is pretty amazing. I was shocked at how bright it was. But quickly, s to use collibra and libra . Anyone that can open an account, in countries where we can operate. Who can use a 20 bill and who cannot . Anybody can use a 20 bill. This 20 bill does not discriminate on anything you could be a murderer, you say horrible or great thing, this 20 bill can be used by every Single Person that possesses it, with regard to your network, can miley annapolis use libra . I bring that up, because those individuals have been banned from facebook. First i want to say this. We only have five minutes, you have to answer questions so we can be vetting what you want to. We have to be thoughtful about those issues. Im trying to respond properly. On one side i want to stress that a platform that enables you to community and share ideas, facebook we believe is a platform that accepts ideas across the political spectrum spectrum. Can milo use this . They are banned from facebook, can the use it . Yes or no i dont know yet. If i am a gun dealer, i can use a 20 bill because it is a lawful gun. That happens all across america. On facebook, you dont allow gun sales. So can a gun dealer user system . This is a question that is really important to get right. We have not written a policy yet. A level you are doing, but we have to look at the social policies of who can use this crypto currency. In a way, we get to set the social policy of who is in and who is out, and everybody gets to use it. By fear in a roundabout way, with social scoring in china, with the right social score you get a loan and get employment, access the train facebook is doing the same thing here. It is using social standards, and not everyone agrees with your social standards or platform. That is the way that you access platforms, so we have to conform to the standards of facebook to be on your network. The right answer were to say would be to say if you are abiding by the law, everybody has access to this is congressman, personally i believe that we should not be in the business of telling what people can do, or deciding what people can do with your money or not. That said, the important question and we need to be thoughtful about the policy. There is major pushback when we look at your network and say who is on and who is off, you are the judge and the jury. For this system, i think you are going to see a lot of pushback from both sides, i think. Go ahead, quickly. I think we need to be very thoughtful about this. The thoughtful answer is if you abide by the law, you have access to it, that is the thoughtful and the right answer, you have not given me that, which gives me great pause and concern. The model of leave it is going to be the model of where we get to decide. That concerns me and i am also concerned about data privacy and how you will use the days of your there are concerns about data use on facebook. How you will use this data. What we post on facebook and who we are friends with is one thing, how we spend our money is really powerful information. And you have access to that as well. The freedom of liberty, kudos on the innovation. I think you should have that freedom on your thank you, madame chairwoman, mr. Marquez, this is one of the more interesting earrings we have had. I had the honor of sharing the new democrat coalition, if we do one thing, we get excited about innovation. But this is not an app that measures your heartbeat, this is a complete overhaul of the circulatory system of the global economy. A lot of the concern is around this shocking ambition. I want to take you through a specific scenario that gets to a larger concern that i have, so folks at home can follow along. Just imagine that i am an american user of libra. My rent is 1000 per month. For the sake of simplicity, would say this is 1000 libra per month. Libra is backed by a basket of currencies. Lets see that the value dramatically changes in a couple weeks. I think i will find in the next month my 1100 dollars per month you know what i am getting users will have profoundly unfamiliar experiences of assuming foreign currency risk, am i correct in that . , yes, there will be fluctuations in the way that we intend to design the reserve in consultation with the working group street Central Banks. It is going to be in such a way that we look historically at the volatility of the dollar has had in the last 20 years compared to libra, and half the basket is dollars. This should be fairly stable. I get that you acknowledge that consumers everywhere, users of libra full will for the first time, after using must currency to purchase must, they will experience foreign currency risk. They will have some degree of volatility. Right. My question, the important point for people to understand, not saying that is good or bad. Traditionally, if you are going to assume an unfamiliar risk, that risk will be disclosed to you with full transparency. The mechanism we traditionally used to disclose that kind of risk is through public filing and disclosure. You said that this is not an exchange of funding, this look exact to me like Exchange Rated fund backed by a series of short term instruments in foreign currency. Even has a creation and remittance mechanism elaborate to me why this is not an Exchange Rated fund. And if there is any ambiguity, but i am really getting at here, if the regulators determine it is ctf, you need to clear registration hurdles. It is designed to protect the rent pair who discovers that rent went up for reasons they dont understand. Tell me why this is not an Exchange Rated fund. Three points of why we believe it is not. You are right, it uses operational mechanisms that are similar. We believe it is not, is a will typically, the question the fcc says if you have a security that is backed by other securities, you are an Exchange Rated fund. You may quibble with me that you are not a security, but you are certainly backed by other securities. You want to answer your question. First we believe that no one will buy libra as an investment because it is designed for stability, number one. Second, when you look at the difference the definition of securities used by the fcc, it uses the idea that you invest for profits, resulting in the management of the product. This is not a product, it is a payment tool. It will not be actively managed, you cannot use etf for payment, this is actually designed as a payment tool to enable people to retain value. I am almost out of time, come back to my original question, how will you make transparent what acknowledged as foreign currency risk that consumers will face . As far as the wall is concerned, you will have transparency and Education Bill into the products. Thank you, my time is expired. Thank you madame chair and welcome mr. Marcus. We all want to encourage innovation and i appreciate your innovation, i want to encourage innovation and i would like walk through a timeline so we know where we are in the innovation process here. Correct me if i am wrong where i will just ask yes or no questions. Sixty days ago you announced the idea, correct . It was on june 18th. To the with on june 18th. There was nothing in may . We are 30 days from the white paper. This is a really early congressional hearing. With that i will understand. You wont have the answer to every question. I appreciate your commitment to be willing to ensure that you meet all of the regulatory hurdles and comply with the law. The value that i see in this innovation is of course crossborder payments, that is so expensive today. And you talk domestically, but can you tell us what is in it domestically that already has banking . I dont see a big application. Congressman, im glad that you asked. I dont will will pay rent with libra anytime soon, to relay the question from earlier. When you have a bank account and you are properly banks, if you want to send money abroad, you will connect your debit card with one of the wallets. You need to make that crossborder transaction, you will save a lot in the process, but if money comes back, you will deposit it back to your Bank Accounts. You dont expect people to be holding libra . The point is to have a Stable Currency, not a volatile currency. About 60 of the World Population lives in a country that does not have a Stable Currency. I appreciate that and think there is some value in that and i do have some concerns about the potential of Money Laundering, as you know, the silk road started as a way to anonymous finance illicit activity. That is one of the early things it was used for peer i am concerned about payments that could have bad intentions. Will you put a limit on the amount of any individual transaction . I recognize the timeline of where we are. Do you expect to put a limit . We will continue engaging, notably with the treasury, on this topic. My expectation is that there will be limits depending upon where the money is sent, or where it is coming from my hope is that between consumers of american regulated wallets, we can avoid having artificial limit. But we will probably need limits across the Network Without i obviously just want to make sure that you comply with anti Money Laundering, complying with the law, you said you expect to have the Libra Association Companies Really not my decision decision. It is going to have to be a decision taken by the council of members of the Libra Association, and the Libra Association itself i recognize that i will urge you not to use this for social engineering using the intent that we talked about, thanks cross border social engineering. I appreciate your time. I appreciate the innovation and your time. I look forward to working with you, as you were to make sure you follow laws and regulations. I know that it will be a challenge as you will be dealing with the regulations of 200 countries. Take you very much. The gentleman california, mr. Sherman is recognized for five minutes. We need to get Mark Zuckerberg here. This is the biggest thing, that this committee will deal with this decade. While we have one of his employees here, this is his program. We are told by some that innovation is always good, the most innovative thing that happened this century is when osama bin came up with the innovative idea flying a pair of airplanes into towers. This may do more to endanger america than even that. People call this the libra, it is not going to be called libra, this is going to be called a zuckerberg bucket. He knows they want comply. First he promises that the anti monday Money Laundering is going to be here, that only applies to the collibra while. Keep in mind as the bitcoin is 46 of the transactions, according to one study, or for drug dealers and other nefarious opposition operation, if i most want contributions, bitcoin has a problem is there is no offense, there is a way to just purchase a bitcoin. In the white paper put out by facebook does not link it comes to realworld identity. User can create multiple accounts. This is a godsend drug dealers and activators. Zuckerberg does not have billions but he does not have the authority to print more until he gets this. We saw the link to gold. And the dollar became valuable in itself, no we can print many dollars depending on how much we have in store. Mr. Marcus promised me that they would never do that but he testifies here that the Libra Association will make all of the decisions and this book will not be in control. So much for those premises. Americas power comes from the power of the dollar. More than the power of our military. It lowers the Interest Rates of the United States by at least 1000 per family. The fed has been allowed to transfer 100 billion in some years, or list of the treasury. Sanctions in iran, they are only effective because of the power of the dollar. We were able to go after human traffickers, drug dealers and they are not going to solve problems with this. Cross border transmission, lets do that in dollars, or let us send whistles to let them all. You have a multibillion dollar, trillion dollar company, help will make transmissions. Use dollars or the local currency. They dont want to solve those. They want to solve other problems. Everyone, Mark Zuckerberg cannot money yet. Second problem, he is under attack because he invades the privacy of ordinary americans. And he sells it to the highest bidder. Get privacy and he is creating a device to provide privacy. We need Mark Zuckerberg here, because we need to tell him that he probably has the power to push this through. He will throw around tens of hundreds of millions of dollars in washington. Is getting huge zuck bucks. One hundred lawyers will tell him that what he is doing is legal and there for he is safe someone with an understanding of the politics of this country needs to explain that if crypto currency is used finance the next perfect terrorist attack against americans, 100 lawyers standing in a row charging 2000 per hour are not going to protect his beer and from the wrath of the American People. This is an attempt to transfer in normas power from america to facebook and a number of its allies. I am surprised. We need Mark Zuckerberg here. The gentleman from kentucky, mr. Barr is recognized for five minutes. I think given the commentary in this Committee Hearing today and some of the very pointed questions directed your way, i think we are discovering why a decision has been made to locate in switzerland as opposed to the United States. Having said that, i do want to address some of the concerns that have been raised. I want to ask you about them, i think there are some legitimate questions that we can ask, but it does seem like in washington whenever the private sector produces innovation, New Discovery or advancement, politicians and bureaucrats rush to criticize and regulate with only the presumption that the private sector innovating is a bad thing. I think the presumption should be totally reversed. We should presume that innovation is good, it presents enormous opportunity for Financial Inclusion, reducing friction in transactions, and opportunities are created by this innovation, it is laudable, it is to be commended, that is not to say that we should not ask russians but the resumption in this room today seems to be in the wrong place. Let me ask you about the possibilities, the opportunities that this presents. Particularly with respect to Financial Inclusion. What percentage of users on facebook are not banked in the unit states, mr. Marcus . Congressman, i do not have the answer for facebook specifically. Over 8 million households in the United States. Why dont you know . Facebook is often criticized for invading the privacy of americans, why doesnt facebook know approximately how many of the 2. 6 billion users are banked are under banked . There is no way for us to know that information. Okay. Do you have any idea how many users of Facebook Live in Rural America for banked deserts . I do not have the exact number, congressman. But i can find out follow up with you. If you know or dont know, we would like to know that. How will the project libra promote greater Financial Stability in the United States . You think the ability to access digital money where you can safeguard value, and transact with people for free, with a 40 smart phone and a basic data plan, it is something that would enhance the ability for people here in the us, it will solve homes for a lot of people here in the United States. Notably the very people who are unbaked today and send money abroad, and home, which makes for the bulk of the income of families back at home i will jump on to the point that mister duffy was making earlier. The opportunity for Financial Inclusion is enormous and very positive. I share concerns about what that inclusion actually means. To the extent that facebook and other social Media Enterprises have been criticized for political bias, it is important to earn the credibility of the American People. This financial platform as a neutral layer so that the adoption will serve this ultimate purpose of Financial Inclusion. The final question relates to the testimony that you have delivered that this project will not complete with centralbank Monetary Policy. And whereas the queen and other Digital Currency endeavors do not present a challenge for Central Banks, this could, because of facebook having 1. 6 billion users, it has four adoption big enough to potentially displace the us dollar currency, and there for interfere with central banking tools, interfere with Monetary Policy, libra will undermine currencies and power of Central Banks, or is it the very point to undermine central bankers . And to provide a greater freedom away from central banking. Congressman, i want to be very clear, we do not want to compete with the dollar sovereign currencies, this is why they make the reserve even in our wildest dreams, never would become anywhere close to the size of any of the currencies that you mentioned. But we will make sure to work with the fed, with the Financial Stability board, and with working groups internationally, to ensure the proper controls. Your time has expired. The gentleman from illinois is recognized for five minutes. Thank you, madam chair, over here, thank you. I was perhaps the only ai programmer in congress. I want to thank you for having rather detailed individual meetings with me on this, there are couple of things i was promised during the briefings that have not been delivered. One was a detailed discussion of how you would be preventing the use of this for rent somewhere, are you prepared to give that answer . If not, i would like to drill down into just how anonymous these transactions with libra can actually be. Rent somewhere is a really important issue, were about the collibra itself i am interested in libra, which is an anonymous instrument, am i correct . It is not anonymous. Custody is allowed . Within limits, yes. We believe, especially in countries like the United States and others who will have all the wallet. Im not worried about wallace, i am worried about the abuse of self custody, if i on the cryptographic code, do i own that libra full stop or not . If you do. If i offered to trade that, to have any technical way of stopping me from treating anonymously . Yes, there are on and off ramps. All of them. So a large fraction would be transferred into self custody. Then there starts to be a significant flaw among self custody entities along the dark web or other places. How be a flow. How do you prevent that from actually allowing things like rans ransomware . Congressman, very important problem. And the way the association will enable tools so that Law Enforcement can understand where the movements are happening to prevent those issues. Its going to be one of the ways we will address this. Were going to have to be absolutely dependent on the fact every single wawt is in a Regulatory Regime we trust. So if theres one wallet on some set of islands or Something Like this that doesnt follow are we just out of luck there and then all the illicit tran actions will flow through there . No, congressman. If youre a u. S. Resident and you want to use a wallet the wallet will need to be properly regulated in the u. S. I want to mention cyber security. One of the main jobs is to oversee cyber security. Youve seen fit to make a new programming language for here. Theres some creative stuff in it. Some of it is pretty much copying things that have been done before, some of its brand new. Even if it had zero creativity in it, there would still be a problem one line of code could crash the entire libra system. So the governance of that language and all the infrastructure, youre going to be distributing run time executions and things like that as well. All of that has to be bulletproof cyber security. Congressman, two ways. First we agree with you that this is of absolute importance. And the way were dealing with that is that the move language your referencing will have formal verification in place to the extent there are no compiler bugs. Yes, but the compiler will not execute the code if the code is not formally verified. And we have the chance of having david dill who is a professor from stanford in form verification helping us with this issue. The other thing i want to say is that the association will have guidelines on what Third Party Code can be published or not. And at the at the very early stages it will be very limited to a set of templates that will avoid the issues that youre raising. It will be an ongoing target because if libra is taken to scale, it will be an enormously fat target for cyber attacks, intrusion, insertion of Insider Threats and so on. This is something in terms of overall Financial Stability probably as crucial as anything else. I thank you and yield back. The witness has requested a ten minute break. The committee stands in recess. The gentleman from colorado is recognized for five minutes. Thank you, madam chair. Mr. Marcus, thank you for being here. Fascinating conversation and i think a lot of the questions that are going on are expressing concerns that not for innovation, just in terms of what were going to be seeing come out the end once the process is completed, i did have one question because there does seem to be some confusion and you didnt actually clarify in terms of exactly what were talking about with libra, in terms of being security and etf, possibly a commodity that can be there. Along those lines when youre looking at Libra Association, youve got visa and master card, are you doing any active recruitm, talking to any other Financial Institutions to be able to be on the association . Congressman, the Association Membership is actually open as long as members meet the criteria that has been published. Of course that could be subject to change and is in control of the Libra Association. But we expect that there will be a number of Financial Institutions including banks joining its ranks. Monitoring Association Members just to make sure bad actors dont get into the association. Yes, congressman. You know, one of the things weve had a fair amount of conversation on is knowing your customer, the ability to be able to identify who those people are and wanted to be able to follow a bit up on that in terms of the commitment youre seeing come out of libra. We passed and signed into law last year the mobile app, to be able to open up a bank account with your drivers license. But it was followed with a commendment from the banks that that information would be eliminated once the account was opened, wasnt going to be retained. Are you making the same type of commitments . Congressman, the general desire as far as the calibra wallet is concern is to only retain the data for as long as it actually is required to operate the service, notgy longer. So if the government issued i. D. That is captured is not of any use notably for protections then it will we will commit to the same rule. Okay, and i think its important because not to parse some words but when you say desire to, i think thats something wed like to see a commitment to in terms of the policies youre going to be putting in just to protect privacy. Because i think its been spoken here several times you know there are some real concerns over facebook and issues with privacy right now. You know, youve talked a lot about also wanting to be able to reach out to the underserved, talking about overseas payments. But we have actual banking deserts within the United States right now. One of the key components is obviously to be able to have highspeed internet access. My home state of colorado, 14 of our population which does not have access to highspeed internet. Do you have any plans to be able to do outreach, be able to build out some of those networks, be able to provide the access you said youd like to see for underserved markets . Congressman, not as part of the calibra effort per se. That being said facebook has invested and continues to invest in helping and providing access around the world and will continue doing so. But as far as the calibra wallet is concerned were really focused on that population that currently has smart phones and a basic data plan and is underserved or not served at all by current Financial Services. And one of the questions wed had from some of our constituents concerns some of your Community Banks. Theyre saying they have some worries and represent a point of competition for traditional Financial Institutions and Payment Systems as they overlap on of the Core Functions between your proposal and the kind of products your proposal could lead to in the regulated institutions. Do you believe that calibra and the Libra Association should be subject to some of the same regulations on the banking side as our Financial Institutions are . Congressman, first i want to recognize the role Community Banks play and i hope that they can participate in services on top of the Libra Network as well. And as far as banking regulation, if we ever enter into providing Banking Services which right now were not considering, then, yes, we would need to have proper banking regulation. But as its contemplated right now as far as the can calibra wallet is concerned were going to be focusing on payments. My time has expired. I yield back. Thank you. The gentlewoman from ohio who is is also the chair for the subcommittee on diversity and inclusion is recognized for five minutes. Thank you, madam chairwoman and thank you mr. Marcus for being here today. Kind of a great segway for me with my colleague. Youve heard a lot today and weve tried together a lot of information whether it was cyber security, governance, antitrust, investment ownership, and now the under bank. As you heard i am the chair of the diversity and inclusion subcommittee. So when i hereunder an unbank, traditionally that goes to a lot of people who have some challenges economically. I have pulled and gone through your white paper. And as i look at that, it wasnt very unique in your problem statement to me when you were citing 1. 7 billion adults globally remain outside of the Financial System and that libra will connect the world to them in a unified financial ecosystem. I think thats a lot of words but when i think about the under and unbank, here is the question that i want to ask you. I want to focus on one of the reasons that i read that libra gives us for why we need a global currency and that is to address the millions of unbanked and underbanked people in the world. Despite this claim in response to a question at yesterdays Senate Banking Committee Hearing from senator brown, you stated that the libra was not designed to compete with Bank Accounts. Additionally you said in response to senator kennedy that libra will not engage in banking. Can you tell me how libra banked and unbanked and underbanked, how you will work with them if its not meant to compete with the banking accounts, and fure youre not engaging in banking . Well, im glad you asked the question, congresswoman. And i want to separate the different types of services that will be provided. Youll have to do that quickly because i have two more questions. Ill do my best. Let me ask you this way, are you competing with banking or not in your opinion . No, congresswoman but we will do you consider yourself a bank . No, because we will not offer are you taking peoples money and letting them pay for things, letting them transfer money . We will be active in Payment Services, congresswoman, and enable all of these people who durptly dont have access to modern Payment Systems to move their money around and have access to the world economy. And as a result well be in the payments business, congresswoman as far as the calibra wallet. I ask you another question on governance. I think in your Opening Statement that you said it would not be overpowered by facebook because you would only have one vote. So in the world of banking because in my mind its still banking, were dealing with a lot of banks who merge. So lets say with your one vote you would buy stripe or you would buy spotify, would that now still give you just the one vote or would that give you more control . Because we know these things merge and get bought out all the time. So if you bought those things, would that give you more power . It would not, congresswoman, because in the way that the governance is currently structured no one entity can have more than one voice or 1 of the vote. So let me go to someone asked about the training and Financial Literacy. We know those who are unbanked and underbanked are that for a reason. This is very complicated. We have some of the best minds here on both sides, and kierly theres a lot of Unanswered Questions or clearly you can tell from our questions theres a lot of disagreement with this. How do you take somebody from my district who is underbanked or unbanked and educate them if theres no Financial Literacy, they think youre a bank because even if when you mention paypal and those systems which you were the president of, i use paypal as a storeowner but it was tied to my credit card and tied to the regulation of the federal government. So how do you tell us its not banking . Because if its not tied to any of those things, how does it work . Where is my protection . What happens if i do this and we already know im ignorant to the process and then i want my libras back . Can i get them all back with no problems . I can get them all back and put that money back into my account . Yes, congresswoman, in the same way paypal and others are connected to the Banking System caleava wallet will also be connected. My time is up. I yield back. The gentleman omfrom texas mr. Williams is recognized. I want to echo some comments from some of my colleagues. So far private companies are beginning to form an association with his release. We talked about a 12page white paper. It seems like theres a lot more work to be done internally at libra before we in congress can examine all the security hurdles we are concerned about. There are many more processing the pressing issues we need to deal with i believe before we all go home for the august recess in a couple of week. A reckless Government Spending is still out there. Theres no budgeal deal, no xm authorization deal. Were at the beginning of Hurricane Season and we still cant get the Flood Insurance package to vote on the floor. I understand this idea but i think our time would be much better spent working on issues that would benefit the American People immediately rather than try to stop this from being explored by facebook and other participants. We should not discourage the private sector. Im a big private sector guy. We should not discourage the private sector from investing their own time, their own money to research these new technologies no matter what policies we enact up here in congress. The private sector is the engine that creates solutions to some of these great problems. And mr. Marcus, i applaud your entrepreneurial spirit and it leads me to believe you are a capitalist, are you not . I believe we all are in this country. Thats good. That helps our record there. Also with that in mind would you believe the private sector ratherthen the government is better suited to explore the potentials of Block Chain Technology in the Financial Services space . Congressman, i believe that in this specific case it requires both the innovation capabilities of the private sector and the oversight of the government and regulatory bodies to be successful. So facebook has already stated it wont launch their crypto currency in india due to the regulatory issues. Do you anticipate you will not be able to launch this project in other countries . Congressman, there will be countries in which the calibra wallet itself will not be able to operate. But since the network is interruptible and other wallets can emerge in different regions and interactions are possible between wallets unlike the Current System which constrains transactions within one wallet, we believe that others will emerge in other countries that will enable access to greater number of people who currently dont have access to modern Financial Services. Something i saw in your white paper is that the leaver association is a nonprofit, yet it will pay dividends to investors who provide capital to jump start the ecosystem. So can you go into great detail on how you reconciled the association being a nonprofit . Yet you will pay dividends to the investors. Yes, congressman, so the association is a nonprofit membership based association under the laws of switzerland that are slightly different. But that being said if and the goal for the association is not to generate a profit, but if it has to pay out income streams, it will pay taxes on those income streams as covered by the swiss law. As a Small Business owner i see the benefits this could have an remittance payments to other countries, and with lowering transaction costs. So innovation is a good thing and theres no reason we should be stopping this idea so early in this existence. That being said, i begin to get concerned if this were going to be used in lending. So the eventual goal to use cripty currency in lending . Congressman, as far as the calibra wallet is concerned, it doesnt have any plans to do so as of now. I do believe there might be banks around the world that might want to engage in those types of services. This is definitely the province of banks and not something that the calibra wallet will do itself and is not in the plans right now. Real quick, the white paper also states the libra block chain is synonymous as you say and allows you to hold one or more address that are not linked to their real world identity. How you plan on sprieking a correct balance between privacy and being able to hide criminal activities . The fact theres no personally identifiable information on the block chain is not a virtue of the fact that people are not identified on the platform. It is just that it would be irresponsible to have personal data be publicly available. That being said wallets and on and offramps will be regulated. Okay, my time back. Thank you for being here today. Gentleman from guam, also the vice chair for the committee on Financial Services is recognized for five minutes. Thank you, madam chair. Mr. Marcus, what does the organization predict the average user will have as a uslibra balance . Congressman, we have not projected average balances at this point. You really expect me to believe that . Facebook is built around average numbers, average number of hits, visa master card all these huge players are signing up and you guys have no idea how much you expect to have in the average libra account . Congressman, it will really vary depending on where the usage of libra, the currency and network. Can you give me a low estimate and high estimate of what the variation is expected to be . Congressman we are not made brokes of this, but we would be happy to follow up with your office and your team when we do. First of all, i absolutely disbelieve that. As i said those organizations are built around understanding their users and what theyre anticipating their usage is going to be. And i think youre just trying to hide that figure because when you actually start doing the math it becomes very, very alarming. In your own posts, sir, you mentioned that billions of users we firmly believe if libra is successful it can be a nonlinear step change for billions of people who need it the most. So if were talking about 100 in the libra account, youre talking about 100 billion. If youre talking about 1,000 in the libra account, if youre talking about 10,000 in the libra account. And so i think that the amount that were talking about in terms of an average user is critical in order to understand the full scope of how pervasive this kind of action is going to be. And im going to go through why that is so critical. Your 20 founding members, a lot of big shot companies that have come together seemingly overnight and under the radar. And the white paper you submitted says youll have 100 members years from now. Youre going to triple your growth in one year and you guys dont even know what the average libra wallet is going to hold. Were just going to pretend that that figure is some unknown number, but were going to bring in 72 new players. Are any of these players fortune 500 companies . Yes, congressman. So how are you able to convince visa and master card and 72 new fortune 500 companies to signup for something without even knowing what the average user mod is going to be . Congressman, i want to respectfully say that im not hiding anything. Im here responding truthfully to all the questions with the information i have at this time. Yeah, i mean thats what youre saying but sensibly i think we can all be sensible people. You wont get these huge fortune 500 companies signing up but they wont know what theyre signing up for. Even facebook alone in your own posts you said you have 90 million businesses on the facebook platform that are going to be able to attest to this is how this is going to be something empowerment to these. And thats just the master card platform. These 72 other companies all lining up without any kind of idea how much theyre actually going to be getting involved with. And this is so important because youre talking about billions of users and tens or even hundreds of dollars. Thats money thats getting sucked out of the u. S. Financial system and being put into whatever is put into in terms of libra and calibra. That many users and that many dollars means the u. S. Is going to be disproportionately affected by libra and calibra. And Interest Rates will have to rise to attract investors. Higher Interest Rates will injure the u. S. Economy and u. S. Jobs. Higher Interest Rates perhaps more importantly will raise the costs in funding u. S. Military operations and national security. And if thats going to be the case, how do we put a stop to it . Lets say we have hundreds of millions of users in the u. S. And they all put in thousands of their own dollars, how do we put a stop to it once that risk presents itself, because if that risk presents itself and we cant put a stop to it, what happens then . And if you think that congress and the elected leaders are going to be able to put a stop to it, one thing to realize when you have hundreds of thousands in districts its going to be politically impossible to do that. I yield my time. The gentleman from georgia mr. Loudermilk is recognized for five minutes. Thank you, chair. Its been a long day. Look, i want to thank you for not only your time being here but the willingness to look at new ways of doing things. Thats been the strength of our country. Quite frankly i dont care for facebook. It is a nightmare for many of us in this type of position. I dont care for some of the filtering thats done suppressing some of of our posts because of political content. But youre a private business. Its your right to do so. But i do appreciate anyone who challenges the status quo to look for something new and a better way of doing it. We have concerns here, and i think this is actually a platform that we can address those concerns, we can begin a dialogue and i appreciate that. What youre experiencing right now has been experienced through any innovator throughout our history. The Washington Post in the early 1900s had an article entitled man will never fly and shouldnt, and it went through all the reasons why we should even stop testing an airplane, especially when you had two bicycle mechanics from dayton, ohio, trying to fly when scientists and . Gen ears couldnt. Thomas edison, there were dozens and dozens of articles written about how the light bulb was a dangerous inveng if it was ever accomplished and would be a Public Health threat and should be stopped immediately. All of those ended up being great advancements and that rightfully so was regulated by government for those Public Safety and Health Benefit reasons that it could be done safely. But the point is we cant demean these things until we actually look into them. I do have concerns, but i think unless im willing to express those concerns, and im willing to actually hear your answers, were getting nowhere. With that i want to use up all my time. One of the big concerns of mine spending time in the it industry and Data Security is, look, crypto currency is used for illicit financing. We know that. Monday laundering, human trafficking. In fact its estimated criminals use crypto currency to steal 1. 7 billion from investors just last year and 56 of that happened here in the United States. The treasury secretary, he said hes concerned that libra could be used for these purposes. How can you assure us and the American People that this isnt going to be just another illicit financing tool . Congressman, thank you and i share this concern, and this is actually something i care about personally a gratd deal. I dont want the creation that were working towards to be used for those types of purposes at all. We believe that with the appropriate control and proper email programs, the proper kyc on and offramps that we will improve on the Current System. Theres a lot of illicit activities currentlyae on our existing Financial System and i actually believe that with a combination of the right technology and ability for Law Enforcement and regulators to also have a view into some of the movement that we will improve on the efficacy of aml and Counter Terrorism funding programs. Gh so some of the push back we got from Law Enforcement an advocate for looking at block chain for the technology, a lot of folks here have a fear, some justifiable fear of crypto currencies. When you remove the stigma of crypto currency i think block chain is Valid Technology but we do get a lot of push back from Law Enforcement on the use of block chain. Have you had engagement with Law Enforcement on this, and if so what is their thoughts, their concerns, their acceptability . How are you going to do that interface . Congressman, we will continue to engage notably with the Treasury Department and notably the department that looks after Money Laundering and Counter Terrorism funding with the under secretary and her team and also globally with a number of Law Enforcement and regulators. With the remaining time i have i have other questions im going to submit for the record but youre going to basically be a global Payment System which is typically regulated as Central Banks are done, pretty heavily regulated. Would it be appropriate for fsoc to actually designate libra as systemically important as some have said you will be . Congressman, again, its really not for me to say who should regulate us, but weve definitely been engaged not only with fsoc but those under the umbrella. We will engage in mostly Payment Services but its not for us to determine in my opinion. Thank you. The gentlewoman from massachusetts is recognized for five minutes. I really do appreciate your leadership in returning this committee to its oversight role. And i want to emphasize to my colleagues on both sides of the aisle the reason were here today is oversight or more accurately the lack of oversight in this space. The fact we have arrived this far along in the conversation without any regulatory guardrails to inform the development of this project on its face, just that fact alone is problem. It is long pastime we stop compromising in the pursuit of profit. When consumers wellbeing is on the line with the senments of the gentleman from arkansas we cannot afford to simply trust but not verify. So thats what were here to do today, that is to verify. So yes or no since my time is short, are you familiar with the content of facebooks press release announcing the launch of calibra . I am, congresswoman. Great. At the end of your press release there is a disclaimer that states and i quote, those Forward Looking Statements may differ maturely from accurate results do to a variety of factors and uncertainties many of which are beyond our control, unquote. In it you go onto admit this is all, quote, based on assumptions that you believe to be reasonable, unquote. And of the date of this press release. Chairwoman i ask for unanimous consent to submit to the record. Without objection. Yes or no would you trust your money with a company that essentially admits its just winging it . Congresswoman, i dont believe that is the case and this is why weve shared our white papers and our ideas reclaiming my time. The disclaimer end by saying, quote, you undertake no obligation to update these statements as a result of new information or future events, unquote. But, again, moving on, on the issue of under banking which is an issue this committee is very committed to addressing over the leadership of chairwoman waters, representative beatty was citing the white paper where you 1. 5 billion lack access to institution. Half of all who dont have Bank Accounts are living in seven countries. China, bangladesh, indonesia, mexico, nigeria and pakistan. I dont know are any of libras 27 pertinent organizations based in these countries . Not at this stage, congresswoman, but by the time we get to 100 members we hope to have a more representative slate. Do you believe as its been claimeda thenication is the reason many of these people dont have Bank Accounts . Congresswoman, there are a number of issues moving on. Im claiming my time. So the same World Bank Report finds almost two thirds of people who dont have bank kaekts say its because they dont have enough money to open one. Mr. Marcus, does the calibra wallet require a bank account, yes or no . No, congresswoman. Does the calibra world require a smart phone . Yes and now you can buy one reclaiming my time. Would these pay any interest for the money they store in currency . Congresswoman, it is like cash and as a result it doesnt earn interest. Okay. So if your solution is a currency that requires them to have a bank account, a smart phone and no returns on their savings, im not actually sure you really understand what the source and the root of the problem really is. Its clear to me when it comes to facebook and its initiatives we cannot trust or verify but i underscore the reason we are here and you have the opportunity to pursue is because the federal government has failed, because the Federal Reserve has failed to offer americans a equitable, reliable, efficient safe and secure system to access and move their moneys. I yield. The gentleman from ohio, mr. Davidson is recognized for five minutes. Thank you, madam chairwoman. I really appreciate you holding this important hearing today. A Bipartisan Group of my colleagues have worked for nearly two years to provide serpt to many aspects of this market. Mr. Marcus, i appreciate you being here on behalf of facebook and in some ways representative from the Libra Association because youve brought to the worlds attention a space that previously has been dynamic in the american market, lots of american innovators. But you see a lot of companies leaving the u. S. Market for switzerland, for singapore, for others not to avoid u. S. Laws but to find the regulatory certainty that weve highlighted does not currently exist in the United States today. My hope is the committee will hold crypto hearings and we can properly address these issues and as weve seen not entirely conflate them with facebooks mixed messages here or mixed history across numerous other platforms if they are platforms. Already there are several legislative proposals in congress that address the crypto currency sector including the act a bill im leading alongside of colleagues. So with that, one of the key differentiators with libra with currency with many other tokens in this space when you look at block chain token or look at bitcoin has come to represent the entire block chain to many people, its like the architecture is the internet, the specific instances of a website. So people know this famous website bitcoin, but theyre not really able to associate the broader architecture of block chain. And just like facebook launched and many other things will continue to launch when the internet was in its early stages we couldnt conceive of all the specific instances that would take place in the internet. In the block chain space, in the tokenized economy were not really yet able to foresee all the specific applications. Thats why i think its important to hold hearings on the topic and hold titles to a card, deed to land, and what youre proposing is essentially different. Its a currency. Its not just a Payment System. Calibra is a Payment System. But you want to do it in a way thats different with the means of exchange. A store of value exchanged in a way similar to legal turancy. Essentially, how is this different to what christine leguard proposed as a synthetic currency . Congressman, the first big difference is that unlike the sdr that youre referencing, this Digital Currency will be available to consumers and will be designed as a medium of exchange from the ground up. Yeah, i dont think thats different at all. Its just weather the central bank is the Libra Association or the imf. But you still have a central banker. If you think of it as a bank in the sense that the central authority, the idea that the Libra Association could ever become decentralized i think gives a lot of people pause because you tend to have it begged not just to a bundle of currencies but in the white paper shortterm securities. Well, currently under u. S. Law if youre trading in securities is the underlying basis for the asset youre selling, thats regulate said as a security. So why would it not be considered a security . You have a special facebook clause . No congressman, certainly not and the reason we believe that libra is not the security is because it is designed as a payment tool. Reclaiming my time. Others are positive there are relatively simple stable coins and could be characterized as swaps or commandos both of which are treated as securities. Confirmed at a hearing last week it does not matter if the stable coin does not have an expect asian of profits. The expectation of profit is key because of the structure of it. In the case here it would be regulated as a security. Setting that aside, we look at the other issues, the board i mean, im going to have to submit a ton of these in terms of questions. When you look at the know your customer proigs and i listen to so many of my colleagues talk about how were going to prevent illicit finance. I look forward to hearing asked how were going to regulate the dollar. If you at a facebook or the libra administration presume to sit over top of this and filter transactions the same way you filter content on your alleged platform i think the public is going to be out. Last i would say if you plan to launch this outside the United States if you cant get regulatory serpt in t regulatory certainty in the United States . Congressman, im glad you asked the question and we will not actually proceed until we get all of the concerns addressed and the proper Regulatory Oversight. The gentleman from new jersey is recognized for five minutes. Thank you, madam chairwoman. And mr. Marcus, thank you for being here today. Facebook claims its new libra venture is motivated in part by its desire to serve the unbanked. Im a little confused how your product will help the under banked given the unbanked are operating solely with cash. How is a person able to open a bank account, convert their cash to libra and transmit those libra to third parties . The way the calibra wallet will approach this is in partnership with agents of cash in and cash out agents in the relevant countries where banking penetration is very low and as a result consumers that dont have Bank Accounts will have the ability to access the Libra Network. So to go to a center to convert and you would hope to set those up . Congressman, wed use the existing network of cash in and cash out. Again, this is speaking for the calibra wallet. Thank you. I think we agree on a key point blotching technology is inevitable and i believe the nonfrontier presented by block chain are an opportunity for Economic Growth and job creation and versus losing out as has been discussed to china and to europe and others. In my district, the Fifth District of new jersey, so many different people work in the Financial Sector or on the cutting edge of Financial Technology and it can be a tremendous job creator for the state. We also agree we need to create an environment to startd here, grow here and create u. S. Jobs rather than going overseas. Im deeply concerned libra will be based in switzerland as youve also heard. Would you agree that part of the reason why you made the decision was not to avoid guardrails but instead to avoid the lack of legislative certainty we had here in the United States . Congressman, thank you for raising this because again the choice in switzerland had nothing to do with us avoiding our responsibilities or oversight. But we really wanted the Libra Association and the libra Digital Currency to be recognized globally as a unit of measure that was acceptable. As a result switzerland offered the International Platform to doing that. And we hope that one day and many, many years down the line that the Libra Association can work very closely with organizations hosted in geneva like the wto, the who, and the bank of international settlements. And weve heard quite a bit, many of us though and id like unpack that a little bit more and why mr. Davidson and i and others working on the act, which is Bipartisan Legislation as you just heard which provides some rules of the road for block chain with a light touch but leaves space for american innovation. So weve heard part of our goal because Many Companies that have been to our offices say, hey, we need some certainty here. We need some guardrails. Maybe its not facebook, but others have certainly said to us we dont actually know the rules of the road here. Have you heard that . Is that something and may not have factored into your Decision Making but is that something youve heard from partners youve talked to . Congressman, yes. Ive heard from Different Companies in the space that regulatory clarity would be helpful. And i know youve seen our piece of legislation. Are there other things that you think we should be doing to help the United States establish itself as a Global Leader in currencies, other steps we could be taking in this body . Congressman, i think the first thing we can do is ensure that projects that are within the oversight and done responsibly actually see the light of day instead of losing our leadership to other nations that are plowing ahead. Right, and that is one of our big concerns here is losing that space but also making sure our people as you pointed out dont evade whether its on privacy issues or others of a u. S. Jurisdiction just to do that. And i its a big concern i know of me and many of my colleagues. This affects a lot of people especially as i pointed the unbanked and underbanked. Im worried as time goes on how do we make sure we dont abandon them in this process. I yield back. Thank you very much, madam chairwoman. Thank you. The gentleman from North Carolina mr. Bud is recognized for five minutes. Thank you, madam chair. I think its important members of this committee for discussing legislation. And i would encourage members to use outside groups like the coin center block association, very helpful in the clarity and topics like this require a different sort of regulation and so the more educated we become the better. So for americans to remain and continue to grow and be a world leader in technology then its vital this committee not embrace reaction in crypto currency, but we must differentiate libra and similar tokens of bitcoin from libra. Mr. Marcus, i want to talk about the issue of libra remaining politically neutral. I dont know if this came up yesterday in the senate, and my colleagues have gone before me including mr. Duffy, bar and davidson, and some others have raised concerns on this and share those same concerns. So in that vein, do you have any guidelines in place at this poiptd in the process how youll maintain political neutrality in your platform. Its an important question, congressman. And there are two parts to this answer. The first is the Libra Association. And the Libra Association will naturally not have oversight or Decision Making around how libra can be used as long as its lawful uses. And then the second part is the calibra wallet and my commitment to you is that as far as policies comes we will be very thoughtful and we will share these with you when we get closer to finalizing the policies that are specific to the calibra wallet. Thank you and when you said you were talking about part one, the Libra Association to be different from calibra, you said if its lawful. I think mr. Duffy pointed this out, if its lawful you should be able to use libra and fought the whims of the ideology of facebook. My concern is that youre going to let hearings like these where you get hooked or nailed on national tv and let that inform decisions on who you do business with, you dont do business with, similar to Financial Institutions. We trusted facebook with our data and they failed, so im concerned without the proper protocols in place people should pause before trusting libra with their financial information. And this opinion is based on countless examples of conservative deplatforming in general big tech. As my senator as my colleague senator Marshal Blackburn said Tech Companies like google and facebook need to start embracing the spirit of the First Amendment not just their own employees. So moving on, in its published materials the Libra Association commits to the Libra Network transitioning from a Permissioned Network to permissionless one in five years, is that correct . The stated goal, congressman, is to start that slow transition five years after the launch. Given this would require the investors to give up all their interest and revenue generated from this created reserve, what incentive would they have to do that . Congressman, actually this is not the way it will work because we believe that the current members who will run nodes on the block chain will likely continue to be represented because youd have delegation of voting and the delegation will likely be done to the members that would actually have activity on top of the networks. So we believe that it wont be as dramatic of a shift in governance than what has been portrayed. Mr. Marcus, continuing, how can we be ensured by you that this offramp to permissionless actually occurs . Congressman, this is something we will need to embed in the governance of the association and were currently working on finalizing the charter with the other members, and this charter and the set of rules no rules notably on aml, kyc and others will be made public. Thank you very much and i yield my remaining time. The gentlewoman from new york, ms. Ocasiocortez is recognized for five minutes. Thank you so much, madam chair. Im grateful that were having this hearing today. Thank you, mr. Marcus, for coming today to testify before our committee. So i believe were here today because facebook which is a publishing platform, an vdter tizing net, a personal telecommunications network, a content distributor now also wants to establish currency and act through its wallet as at minimum a payment processor. Why should these activities be consolidated under one corporation . Congresswoman, the one thing that we are focused on really are solving problems for the very people left behind right now, and we believe its important because we have the ability to invest and weave the products to deliver those services that will solve problems, the same way we produced costs and people to communicate on our messaging apps. I see. And libra is according to your white paper a unit of currency backed, high reserve governed by the Libra Association. To accountants the term backed has a very specific meaning, usually incorporates Monetary Policy. Yet the libra white paper does not define backed. Can rather it states libra will be, quote, backed by government currency and government securities. So what does backed mean in this sense . Congresswoman, it means that well have a reserve one for one for every unit of libra you will have the corresponding value in stable currencies. So does this mean as stated the Libra Association is not set in Monetary Policy but it has demand from authorize resellers, as it appears today if they are more canadian users than u. S. Users will there be more Canadian Dollars in the reserve to meet . No, congresswoman, the way the reserve basket will be determined will be stable and continue to be stable and we will work with the groups to ensure thank you. And so this governance over the reserve is the Libra Association, correct . Yes, it is, congresswoman. And currently the Libra Association is governed by facebook, ebay, spotify, thrive capital, Union Square Ventures and a handle of nonprofits as well as some other partners, correct . It is correct. Were they democratically elected . No congresswoman, but we hope well have the proper Regulatory Oversight because we agree with you this should have the proper oversight. So who picked the founding members of this governance over the currency . Congresswoman, the membership is open based on the criteria. The first 27 other companies that have joined are the companies that have shared that desire to come and build this network and so will probably i see. So we are discussing a currency control by an undemocratically selected coalition of largely massive corporations. Do you believe currency is a public good . Congresswoman, i believe sovereign currencies should remain sovereign. And we do not want to challenge sovereign currencies. We just want to augment but do you believe sovereign currencies are good . I do believe sovereign currencies are sovereign. Congresswoman, again, we will work with all of the regulators and address all concerns and the regulators will determine ill take that as a no. I should take that as a no . It is not for me to decide, congresswoman. Okay, ill take that as a no. You stated yesterday in front of the Senate Committee that you would be open to accepting 100 of your pay in libra. In the history of this country there is a term for being paid in a corporate controlled currency. Do you know what that term is . I do not, congresswoman. Its called scrip. Are you familiar with scrip . I am not, congresswoman. And the idea your pay could be controlled by a corporation instead of a sovereign government, do you think that theres any risk here . You know youve seen from scrip to the issues with how facebook handled or elections were seeing a destabilizing in public goods. By facilitating instant purchases to a digital wallet, libra and calibra, how could my time has expired. Thank you very much. The gentleman from tennessee is recognized for five minutes. Thank you, madam chair for convening todays important hearing and thank you mr. Marcus for appearing today. Youve been through two days out questioning on the senate side and before our committee and i have sat here today ive heard a number of comments. Certainly those who appreciate the innovation that facebook is trying to apply and those that dont want to stifle innovation but certainly concerns on both sides of the aisle. And as i listen to questions being asked today, your responses, the graphics that have been shown periodically through the day of president trumps tweets about what facebook and libra are trying to do and accomplish and his concerns, just a few minutes before this hearing i did a local radio interview in my part of west tennessee and the radio host expressed very general concern about facebook and libra. It all boils down to this. How do you propose educating and talking to my constituents about the need for what youre trying to do and how it will benefit them . How do you explain it to them where theyre not concerned and not scared . Thank you, congressman. The way were going to make sure that theres proper education in the calibra wallet is that it will be designed in the product experience itself so that at every step of the way consumers will understand what theyre doing and what libra can do for them. I do believe that it will help many people reduce costs notably for sending money around the world, and we will be very clear in education on the Libra Association side well continue to have social Impact Partners focused on Financial Literacy because all around the world its important to improve on Financial Inclusion itself. And as a result we at the Libra Association will continue funding programs and let experts help on that front. Do you understand why consumers are from my standpoint constituents are concerned and maybe even a little scared of your technology and what youre trying to do . Congressman, absolutely. To do this the right way. That has been my commitment. It is my commitment that we will take the time to get this right. Including on education and communication to consumers. Mr. Marcus. A number of questions have been asked. Most recently by congressman Dan Oppenheimer about the decision to locate in switzerland. You have heard that. I assumed you heard those concerns yesterday. I assume you have heard those concerns for some period of time. I will ask you directly. Why not just locate, have it located in the United States . Congressman. I want to say that switzerland has nothing to do about evading our responsibilities or oversight. But we do want the libra Digital Currency to be accepted and recognized as a global unit of measure on the internet. And as a result, placing it the association in switzerland was the right choice, because it is the home of Many International recognize, trusted organizations. That being said, i believe that the vast majority of corporations, companies, startups that will benefit from developing and building on the Libra Network will be here in the United States, and will create jobs here in the United States, and will, of course, be subject to all u. S. Law and regulation. Mr. Marcus. I can appreciate that. But isnt it important that Americans Trust what you are trying to do . And wouldnt they more likely trust it if it were located in the United States . And in some way, lightly regulated by american authorities . They probably would, congressman. Although, they will have a relationship with american companies. And as a result, they will have a trust or not of the different wallets that will operate. And that being said, the goal of the libra Digital Currency is also to serve a lot of populations that are not in the u. S. And as a result, we felt that the choice of an International Home for the Libra Association was the right decision. Last question. You understand why American Consumers would be concerned if it is not located in the United States, and instead located in switzerland . Congressman, i think as far as the consumers here in the u. S. Are concerned, the funds, if the use an american wallet will be here. Not in switzerland. Thank you. I am back. The gentleman from North Carolina. The gentle lady from North Carolina. Miss adams is recognized for five minutes. Thank you madam chair. Thank you for convening the hearing, and marcus, thank you for coming. Like many of my colleagues, i, too, have raised concerned about facebooks entry into the Financial Services industry. And, have gained a little more insight. But i do have some questions. I want to follow up on this a casio cortez, and ask you to explain a little bit more how a Company Becomes a member of the Libra Association. Can you just give me a brief answer. There are several i want to ask you. Of course mrs. Congresswoman. But there are several criteria that are established in our public. And a company or Organization Meeting these criteria can actually join the association as a member. This is a process that is now being led by the Libra Association. So, is the process, is it public . Yes, congresswoman. So, can a wealthy individual invest and become a member . No, congresswoman. Because the criteria has different buckets. So, it is either a corporation that are active in delivering services, or companies in the block chain let me move on. So consumers cant either then . Congresswoman, all consumers will be able to use libra. Thats not what i asked. Can they become a member of Libra Association . No they cannot. No, congresswoman. So, it costs at least, what . 10 million to become a member of the association . Congresswoman, this is not a cost. Members will have to invest in the ecosystem to ensure that it is properly funded. But thats an entry fee . It is not a fee, congresswoman. It is an investment. In the ecosystem. Okay. Let me circle back on mr. Sam nicholas line of questioning. Why would any of the companies and the association make a major investment like this in this payment tool . Congresswoman, i believe in my conversations with all of them, that they agree with us that the status quo is not working for too many people. And that people deserve better. They deserve lowercost. And they deserve a lower barrier of entry to digital money. And that is why they have joined. And of course, they have their own goals, that are business goals. Because they believe that if lowercost let me dictate my time. As a free service, facebooks Business Model relies primarily on advertising and Marketing Platforms to make a profit. 2017, 90 of facebooks 40 billion in revenue came from digital ads and user data. And, that is the core Business Model. Is that correct . Of facebook, yes it is. So, you expect us to believe that youre going to start collecting Financial Data and not share it, because you promise not to do that . Yes, congresswoman. And as well, because there will be many other wallets that we will have to compete with that are not active on social media or advertising, and as a result, we will have to make good on those commitments. Okay. What if anything has been learned from the Cambridge Analytic a standards of the that have occurred on facebooks platform. What if anything have you learned . Congresswoman, we have learned a lot. And, we have now tighter controls on data. We have tighter controls on keeping data from people using our services safe. We have tighter controls on election integrity. We have invested greatly and invest, election integrity. And transparency. I would be interested in what the steps are when you say tighter controls. Can you give me an example . 45 seconds. Congresswoman, yes. What happened with Cambridge Analytical, the way the platform was open back then is not possible anymore on the facebook platform today. Okay. So, how much has the facebook invested in the formation of libra, the libra and the libra investment token that will earn a share of interest . Congresswoman, this investment hasnt happened yet. We are in the days of ratifying the charter with other members of the association. And then, members can decide how much they want to invest, and we will take part in that process like every other member. I yield back. The gentleman from ohio, mr. Gonzales is recognized for five minutes. Thank you, madam chair. Thank you mr. Marcus for being here. I want to jump right in. So, i think what todays discussion is really about is trust. And whether we can trust your company. I think youre pretty low on the trust spectrum, currently and for very good reason. But, essentially, what we are talking about on the association side is the governing body of libra, correct . Yes, congressman. And, of the members today, how many did you cancel it . Im sorry how many did you recruit . A many did facebook recruit . Congressman, we approached a wide range of company. How many did you approve of . 100 of them . Congressman, they met the criteria and had a willingness to dictate. We will not be involved in the decision of who gets to join. But today, everybody, you have recruited all members, correct . Congressman, we have approached number of companies. I think the answer is yes. It will keep going. You created the coding language. Most decisions to date have been made by your company. The claim has been that you will not, facebook, have undue influence over the platform. We are all politicians of this room. I think if we can hand select our voters, we feel come pretty comfortable about our ability to influence whatever decisions are made. So, i would suggest that that is not an accurate claim. Secondly, there is something glaringly missing from the group, which are everyday users. Now, why would you exclude users from having Voting Authority over the association . Congressman, first, i do want to correct one fact, which is, yes, we have created and invested in all of the code up to this point. But now it is in the open Source Community and available. And on the consumers question, it is because we believe that to meet our regulatory requirements across the association, we need entities that are established, that know how to operate those types of programs that are trusted. But, this is also why we believe that over time it is important to have a transition to giving people more of a voice well talk about that in a second. Quickly, on the membership site, you have to be able to validate. You need a 10 million investment. Canha chinese enterprise get in . Canha Chinese State owned enterprise get into the membership . Congressman, this is not my decision. It is a Libra Association decision. This a key principle which, libra is not accepted in certain country or can be used. I believe that company said country should not be part of the so, the answer is maybe . I want to talk about how youre actually going to transition. Right . So, i want to know how you actually do this. Because the promise of a mission the system is the decentralization. Seems like if youre fully decentralized, you were not actually need the Libra Association. So, help me square those two. They seem to be in conflict. You are right, congressman, teresas important point. And, the way that we are thinking about this is, since libra will always have to have a reserve, that it would be backed onetoone. , there will be some form of centralization of the management of the reserve. Because we will need the right oversights to ensure that it is managed appropriately to retain stability. And as a result, we believe that there will still be an association that well not only look after the key principles to operate the Network Within the bounds of regulation and ensuring that proper programs are around, but that doesnt mean that the governance and devoting has to be the same as today. So, i think we can achieve the balance of having more openness. And to me, the key issue with the permission list network is the ability to have known to be more responsible, and as a result ensure the integrity of the network over a long i actually think this is the hardest thing for you. I actually dont think it will occur. If i do predict. I just dont think it will occur, because i dont, they are just fundamentally in conflict. When you talk to crypto purists are launching purists, these things dont match. So, i dont think it will happen. Think we are most likely to see, is a 100 Member Organization that you guys basically control, which, frankly, i love the innovation. But that scares me from being, if im being honest. And then the last point uncle libra specifically. The question. It is the only wallop that will be directly integrated into facebook . Congressman. It will be interoperable with other wallahs directly integrated. Libra wallet will be integrated and whats up and message are. Alongside other wallahs for s as a fully controlled company of facebook, subsidiary of facebook, the argument that you wont be sharing data i imagine you share data between instagram and messenger, i would be shocked if you are not also sharing data at some point with the libra and facebook. Just, i hear you, we promise we will do this. Back what i said at the beginning. Nobody trusts you right now. Sorry. I yield back. The gentlewoman from pennsylvania, ms. Dean is recognized for five minutes. Thank you madam chair. Thank you for being here before us. And what i would like to do is, with a focus on the notion of trust, number 1, say that i was dismayed by your comments to say you dont need trust you. Think this was before the senate. We dont need to trust facebook because there are 28 of the partners. Eventually 99 of the partners in the association. We do need to trust you. We absolutely need to trust you. So, before we look forward to the possibility of libra, why dont we look back . And take a look at the record 5 billion recommended flying, find against facebook. Could you be very specific. Not euphemistic, but very specific, as to the wrongdoing that generated a five alien dollars recommended fine . Congresswoman, first, i do agree, absolutely, that trust is essential. And that facebook should be trusted. What i meant in my comments is that even if you dont, you wont need to, because facebook will not have outside power or governance over the network. If you would answer the other piece of my question, which was, its tough to trust, when the collection, storage and misuse of information, of your users, generated a 5 billion recommended fine. Can you be specific. What have you learned . What has facebook learned . What is the specific wrongdoing for which you are being fine . Congresswoman, i cant comment on the ftc investigation, because it has not yet been public. What i can tell you is what we have learned. And what we have learned is that we cannot launch services, and then figure out how it can or cannot be misuse. We have to take steps in order to ensure that what we launch is actually you cant be more specific than that . When the very thing that you are putting before us today, preformed association, is the exact same idea of what you just talked about . Putting something forward without really testing it all first . Congresswoman, nothing is launched and nothing will launch until all concerns are addressed. Again, facebook had to learn some lessons. Lessons that you could actually say an open testimony to the public as to the wrongdoing and the misuse of information. Please. Assure us that facebook has the ability to say so now. Yes, congresswoman. We have made mistakes. It is true. One of those mistakes, so that we can learn and make sure that you have learned . We have made mistakes around how to best protect consumers data and privacy. We have been working on Getting Better did you share consumers data in an unauthorized way . Congresswoman, there were a number of issues. And we made the answer is yes. Thank you. The answer is yes. In connection with that, fine, consider this. The ftcs investigation was set off by a New York Times observer of london, a report which uncovered that facebook, the social network, allowed Cambridge Analytical, a British Consulting Firm to the trump campaign, to harvest personal information to its users. Do you find that incredibly troubling . Yes, congresswoman. But those things are not possible anymore on the facebook but they were possible and they took place. Because we reacted too slowly. You allow the harvesting of information for the trump campaign. Zach grech . Congresswoman, i dont have the details. Its apparent that the reporting shows up. Lets look to the other side. Before you move on to labor, you want to clean up the messes of the past, and be very transparent. The opaqueness is not working. Lets talk about this. This is structured as a nonprofit. And yet, we know that you are going to take dividends or interest in the distributed out to the Association Members, zach grech . Congresswoman. Yes. This is great. With abby dividends and income . Congresswoman, for whatever streams of income the association will pay out and not keep because it is a nonprofit, it will not generate a profit for itself. It will pay appropriate taxes. And i do want to say that i completely agree with your statement that this process cannot be opaque. It has to be in the open. And this is exactly why. We have shut up plans and yet, you had trouble being transparent about the past. So i do worry about the future. What is the projected income that will be generated . The interest that will be generated, say, in the first year . Certainly you have some timelines of firstyear, second year, thirdyear. What is the income youre anticipating for facebook . Congresswoman, we are not optimizing for that. What we are optimizing four i dont want to talk about optimizing. I want to talk really hard facts. Numbers that people can dig into. Because i dont think the simple example you gave of the young woman trying to send 200 , you guys are just on a mission to help her send money to her mother in a wartorn country. Explain why would you want to get into this business . It has got to be for profit. Where is the profit . Congresswoman, we have done that for communications for the very same woman you were describing. Now, she can communicate with the family for free, using our products. It wasnt the case before those products were available. Time is up. The gentleman from indiana, mr. Hollingsworth is recognized for five minutes. Good afternoon mr. Marcus. I appreciate you being here and investing some time with us and talking about these things. I wondered if you might take a deep breath, take a step back. This is something that you were clearly passionate about. Something that you clearly believe in. And wonder if you might tell us where that norstar is. I know you said it many times you. But i wonder if you might say it again. Why are you so passionate about this . It was is going to help . And how is it going to make a difference to that person . Thank you for that opportunity, congressman. I am passionate about this because too many people are left behind. The costs are too high, and the very people who are left behind all the people who cant afford to be left behind. So, the less you have, the more you pay within our current Financial System. And the more you need to depend on digital money and free or very Lowcost Services to move your money around, the less access you have. So, we believe that advancing technology and building the ability for people with a simple 40 and a basic data plan to have access to digital Money Services would be a huge progress for many people who needed the most. Well, certainly, the fields of indiana are far from silicon valley. But, that is exactly something that they can sympathize with. The feeling as though they are on the outside of the Financial System, or marginally hanging onto the Financial System, or that the cost of using the Financial System are very high to them. That is something that here every day all the way across the district. And it is something really important to this committee over a number of years has done a lot of great work in trying to write some of the Regulatory Framework. Try to help participants get into the market. Trying to enable, empower those americans of those around the world that you mentioned as well. So, if the architecture of this is to be a transaction oriented platform, right . Tell me a little bit about how that difference from a cryptic currency. This is really a Digital Currency versus crypto currency. The architecture is very different and i want to talk about that for a second. Congressman, there are two parts that are different. The first one is really the Digital Currency itself. It is backed 1 for 1 with a very stable reserve. Will confer stability to the Digital Currency. So, that when you pay something, you know what the value is that you are paying, and all the stories about crypto currencies on, gosh, i paid for my pizza with this and i could be a billionaire today if only that then, right . So the design for stability in the system to ease transaction flow . Rick. This is one. 2, the way that the technology has been built and the law changes been designed, its been designed for speed and scale. So that it can meet the demands of the Large Community that we hope to serve one day. Right. So, but, the fundamental difference in the architecture, again, i will purport to be a technology expert, is that this is not a permission the system, right . In the sense that it is peer to peer, right . This will go through a central clearinghouse that says xyz individual owns libra because they are in this register. They can access it, but you have to be a permission corporation to access it, or permissions member to access the database, is that right . It is partially right, congressman. The block chain is permission, but open block chain. And you dont need to be a member to be able to build services or products on top of the block chain. Truth. To build services on top of. But, you cant go in and make changes to the ledger itself, right . That requires permission. Congressman, there is no central body that actually decides what can be added to the block chain the way that the consensus algorithm that is used works. If that transaction is proposed, and that as long as two thirds of the nodes of proof of veterans actions being added to the ledger, it is out to the ledger. Which is different than pure peertopeer technology, right . That is correct, congressman because its use as a consensus algorithm. I guess what im getting to is this is a different type of asset that looks and feels a lot more like a currency, and should be regulated more like a currency, right . As though it is transacting business, right . Where there is a Central Place at which we can do a and l work. We can do other pieces. That is very different than a cryptic currency. And i guess, maybe haphazardly or maybe in a c way, im trying to draw that distinction so that individuals understand that this is different than a pure peertopeer network that has no ability to do that by virtue of its design. The architecture that you have thoughtfully proposed here, not put in place, but thoughtfully proposed, has that centerpiece, where we can do that very work, because the goal of aml is to deny access to Financial System by nefarious actors. Right . We have the ability to do that here that we wouldnt otherwise have the ability to do in a pure peertopeer architecture. Is that true or untrue . Congressman, yes. Thats why we took the permission approach to start with so that we can have trusted parties run nodes to start. And i sincerely appreciate how that architecture reflects gentlemen, time is expired. Thank you mr. Marcus. The gentleman from illinois mr. Garcia is recognized for five minutes. Thank you madam chair. Thank you for being here this morning, mr. This afternoon now, mr. Marcus. Following up on some of the previous questions, what is in it for partners if not to entrench facebook or their own market power by participating in this coalition that you have assembled . Congressman, thank you for your question. The different members have different roles that they will play on top of the Libra Network. And it will benefit their core business. For instance, when you think about the network Companies Like visa and mastercard, they will play a role of enabling that lever is excepted at the merchants. As a result, we will have a Business Opportunity to do so. When you think about the Companies Like uber and left, they will be able to normally reduce costs for accepting payments, but also a number of the drivers, when they get paid, send money back home. They could build services around this at a lower cost for them. So, its all benevolent. No, its not, congressman. Let me change gears briefly. Hawaiian center, brian schatz has noted, in a private conversation he has had with some of the 27 members of the Libra Association, the association a Close Company like uber, mastercard or visa, as well as some nonprofit slight mercy corps, facebook, mercy corps. Facebook has pretrade the Libra Association as a collective, as of facebook is just one of many voices in this venture. But as schatz revealed, facebooks voice is more like the godfathers voice in the family. It is true that it is just one voice among many, but, you know, it is also the only voice that matters. Here is what chet said. Members of the consortium actually have lots of questions, too. Similar to the questions that are being offered on this dais and they have great reservations about moving forward, but they dont want to be left out because of facebooks market power. Facebooks history with partners has added to their caution. The game maker, zynga for example, they say that dramatic loss of revenue after facebook backed away from a close relationship with the company. Facebook also strained relationships with many publishers last year, when it changed the algorithm behind its new speed to deemphasize news stories. My question is, are they participating because they are afraid of facebook . And they might as well be friends with facebook . No, congressman. I want to fully own the fact that we are in a leadership position now, but we will not be in that same position by the time the network launches. And, the existing 27 other companies in the number of other companies, the long list of other organizations all around the world that are applying to join the association, just want to join because they believe that, together, we can build a better system for people. And a better world. I suppose. Quick question. What will facebook harvests when a user transacts with libra . Will it be just the transaction data . Congressman, yes. So, on the libra wallet, we, of course will need to authenticate the consumers before they can open an account. The there will be no other data than the actual transaction data that is needed to serve the purpose of the wallet. What other data will facebook monetize, apart from the transaction data . Congressman, we will not monetize transactional or accounts data, nor share it even with facebook itself. We have learned that facebook has repeatedly allowed Third Party Users access to data without facebooks users consent. Now, Facebook Thomases that its a libra subsidiary will not share data with facebook. How can we be sure that this policy will not change in the future . Can what would enshrine this promise that you have made . Congressman, it is a very fair question. And, i understand that people have concerns. And, commitments have been made. And here, there is one thing that will be very different, which is that if we fail to earn Peoples Trust, and failed to deliver on our commitments, then, they will not use the co libra wallet. We will have portability built in, and we will have the ability for anyone to use any of the many wallets that will be available. But it will all be interoperable. If we dont make good on commitments and we dont learn speed rules trust by making good on these commitments for very long periods of times, we cannot actually win. And we do want the colibra wallets to be successful. And as a result, we will have to make good on these commitments. Thank you. I yield back, madam chair. The gentleman from virginia, mr. Eagleman is recognized for five minutes. Thank you madam chair. Thank you for being here mr. Marcus. One more time, since you can see, i am usually close to last. In these proceedings, what was your title one more time as we go forward . My title is, i am the head of the libra at facebook. A libra facebook. I have some questions. Were getting get right into it because we have had enough now getting going on here. So, my first question is, after white paper there is usually an Implementation Plan. Due for see all of your partners being involved with the alimentation plan for libra before colibra . And once in place, can we as partners in the u. S. Government looking for regular story side of this as we go forward . Congressman, yes. This is my commitment that we will not go forward until we have addressed all concerns and met the regulatory bar and oversight bar that is needed for this network to operate the right way. Yes, sir. You mightve answered this. But are the partners right now involved in the Opensource Development of labor and its applications . Congressman, some of them are stepping up and are actually starting to be involved in the development. And i expect that since we just open sourced the code base, about 4 weeks ago, we will have a lot of outside contributions going forward. So it my surprise, i took a little bit of a libra core. The javascript front end. Actually accesses the backend which is rest, which actually acts helps with the transaction. I know is very, very new. It looks like theres already an International Flavor to it. I think russ to 37 people in san francisco. I went headed into get hub search on whos actually leading the development on the libra core side. Looks like, i think its going to be international because it was like a native nigerian that is actually building the actual libra core in front of the Co Development of libra core. So, when i look at things, you know, from an intelligence backup, i wonder about, is this going to be international . Is there going to be scalability issues . You know that the number of transactions youre doing right now. What i was really surprised by the language in the background. My first question is why was the rush language chosen as the implementation language for libra . I do believe right now from what you have seen, you believe thats mature enough to handle the issues and the security challenges that will really affect these large cryptic currency transactions . Congressman, excellent question on the security of the code and who can commit to the code. And the Libra Association will own the repository for the code. And as a result, while there are many flavors and branches being developed by third parties, only a safe, verified code will actually be committed to the actual libra core base that is going to be under the governance of the Libra Association. Thats what i really am hoping. Because right now, and when i was looking at the nightly build releases, it looks like libra was built on nightly builds of the rest programming language. You know, its a little interesting because thats not how you used to get releases in the dod. I was wondering what the futures of rust are only available on the nightly builds. This is something to get back to me on. What features are only available in the nightly builds that are not in the official releases of russ . And does facebook see that is a concern that they are dependent on unofficially released features of the russ program. And other was, you see right now why the nightly releases, and you see this is just a function of the prototyping phase of this . Congressman, i dont have all the answers to your very technical questions. But, i commit that we will get back to you with more details on your questions once my Technical Team can get back to. And really, some of this is not just based on technical questions, but the International Applicability of libra. So, for instance, we just had eight members of the major banks sitting here and there issue is information sharing based on laws that we have in place right now in the confusion over sharing that data with foreign subsidiaries. And out get into this. If we already have those laws on the book im looking at cft, ml, based on my background, that it some the things that concern me. And also a scalability. You are looking at large transactions and blocks it maybe have never been done before. And you probably agree, thats when we need the white paper and the Opensource Development. But when youre looking at the issues that you have for regulatory, especially for aml, i think the problem for me as we have got a look at this is an international problem. I think eventually, you will have international wallets. I think wallace will be built around the world. I think that is something we are going towards and thats why the scalability question, who is actually doing this . Was partnering, and this is very concerning to me. And its very easy to access these individuals on get hub. There so many from lagos, nigeria is the main code writer for wanted censuses. That something that concerns him to me based on my back on. Those are absolutely fair concerns, congressman. But again, i want to stress that the Libra Association, as a governance body will actually validate the committees to the code, and will make sure to be very thoughtful about who can commit to the code. I would be happy to follow up with your office at the end, i think many members would love to see an Implementation Plan built on top of the white people. Thank you, sir. Thank you congressman. The gentlewoman from texas, ms. Garcia is recognized for five minutes. Thank you madam chair. And thank you, sir, for being here. I know its been a long day. And i think the end is almost in sight. But, i must tell you, i have some real concerns about your premise, that you are really doing this to help the un banked. For me, it just seems that, although you have said in a Washington Post article, this will anybody who has 40 smart phone and a basic access to get your former money. I dont know about you, but my smart phone costs a lot more than 40. And my data plan cost may be that are more. How is is really going to work for the unbanked . I mean, the unbanked white people in my district, a workingclass district in houston, that whether you are your money order or paycheck to paycheck, cash only, consumers. How is that really going to help . How are they really going to have access to Something Like this and be able to negotiate, what could be a very complex system . Congresswoman, thank you for your question. The reason, in america, the people remain on the fringes of the system, is because the costs are too high. And, the cost of the phones and data plans are also high. Are you going to work with your Facebook Foundation to provide more connectivity for people around the areas that dont have access to mobile plans . Congresswoman, the focus of colibra is really on the financial side. And enabling people to have digital money. But, the cost of smart phones and data plans are coming down as a result bye with any digital money if they can get that 20 bill that my colleague was showing off at the other end . Im sorry. Couldnt hear you . I said, why digital money if they can get the green dollars . Congresswoman, they would, because, probably they need to send a portion of that money to someone in another country or on the other side of the country. And the ability for them to access lets go to that example. 200 and somebody wants to send. And i think you said it would be , i forget 14. I guess youre talking about either a money order or some sort of Wire Transfer . Across order remittance. Right. So, in that, you know, they can do that fairly quickly. And they can do it without any advertisement. They can do it without any of the other charges. So, the consumer is whats gonna happen, right . With you, how do you see the person that is utilizing this . Are they a customer . Are they a consumer . How will you treat this . And are you just, frankly, using that person to be able to sell another ad, and do something for your company . We are not, congresswoman. And i do want to stress that, not only is the Current System expensive, but it is extremely slow. Cross order payments im getting in terms of cost. I sit here, and i, frankly, cannot believe that you are not going to charge anybody for anything. You are not a charity, right . No, congresswoman. And i can explain. You not a charity. How much money have you already invested in this project . I think an article i read said you have been into this for a couple of years. How much have you all spent already . Congressman, quite a bit of resources. How much have you spent . How much have you spent . I dont know the exact number. 20 million, 30 million, 40 million . 100 million . So youre not gonna tell me how much invested, but youre trying to convince me that theres not going to be a time that youre going to want to recoup that investment . Yes, we will, congresswoman. How will you do that without charging people, charging for ads, or charging the person, that in my view, you are using for your agenda to get, you know, i dont even know what to call what you all do. Sounds almost something straight out of the, dan brown novel. We belong to the libra. We get to decide. Congresswoman, if i may answer your question, i want you to be more transparent. I want to be more transparent and i want to tell you what is in it for facebook, if you give me one minute. Well, you got 20 seconds thats all i have. I will do it in 20. So, there are two things that we will benefit from a facebook. 1 as we have 90 million Small Businesses, and a lot of users will have the ability to transact with one another. And, they currently cannot transact with one another. And, once that happens. You can do it with a credit card. There are so many other ways i can do that. They can for a number of reasons. They dont have access to the services. The gentleman from tennessee, mr. Rose is recognized for five minutes. I want to thank chairwoman waters and Ranking Member mchenry for holding this important henry meeting. Mr. Marcus, if you want to finish the answer youre in the midst of their. Id appreciate hearing it. You might start over, actually. Thank you for the opportunity. The two is a facebook will make money of the labor network, is, number 1, the ability for the 90 million businesses and the billions of users who are currently on our various products, to transact with one another. And if they can subtly transact with one another, some of those businesses cannot even accept Digital Payments today. The idea that there is more commerce on the platform will actually drive a Small Businesses to expand. And as they expand, they will buy more ads on the facebook platform. That will be an indirect way for facebook to benefit. The second way that we will benefit, is that over time, if we earn Peoples Trust in the use the colibra wallach, we will offer a range of services, lowercost access to capital and others in partnerships with banks and Financial Institutions. , this will be another source of revenue for the company that is completely decorrelated from ads. But, that is in many areas. Those of the two ways that facebook will benefit from the Libra Network being a success. Okay. Thank you. One of my general thoughts surrounding comes down to a simple dichotomy. Either the crypto tokenization block chain space will be a valuable innovation in the long term, or, it isnt particularly valuable innovation. If the former is true, then it is important that the u. S. Creates as certain and Regulatory Environment or regime as possible. By creating regulatory certainty, the value of the growth in this space can be captured here in the United States. Whether that be the value, whether that value be in job creation of the creation of intellectual property or other benefits. If the latter is true, and this is not a particularly valuable innovation, then any discussion may not bear fruit, but is ultimately, no harm, no foul. However, the truth of the matter is that, whatever ones feelings are on the libra project or any other lock chain related efforts, currently, there does not seem to be an adequate regulatory structure to ensure that innovation can flourish while consumers are still protected. That is why i am a cosponsor of the token taxonomy act. There are still many questions to answer in this space. But the goal of the token taxonomy act is one that is quite laudable. Not all block chains are created equal. And, we as a committee and a congress should discuss the nuances of distributed ledgers versus block chains, permission versus permission was block chains. And, utility tokens like file coin, versus crypto currencies like that going. The token taxonomy act is a good first step in that it aims to codify a regime where tokens that dont fit well into our current security small framework. Mr. Marcus, was it a coincidence that the Libra Association decided to headquarter in switzerland, when switzerland has previously outlined clear regulatory guidelines for the industry . Regulatory clarity in switzerland was just one of the components. But yes, it was factored in the decision. Libra strikes me as being very similar to a currency etf. Both and that its value is derived from a basket of currencies, and the way the basket is managed seems to operate much like an etf. If this is true, perhaps it should be regulated by the fec. Perhaps, this is a mischaracterization. The point is, that we need to carefully study the mechanisms of any new innovation in this field, to understand how they should be regulated. Leveraging existing regulatory agencies like the cftc, the fec, state agencies, make sense. But, it is our job here in congress to write laws that make it very clear who will regulate the ultimate, or who will be the ultimate regulator of a potential project. It is congresss job to give the fcc cooler roles that they can interpret and apply. The sec is doing its best. But, they are stuck applying a litany of very old rules to 21stcentury technology. We need to help them succeed by providing some updated guidance. That is the only way we are going to ensure that any development in this space is safe and sound and occurs right here in the most innovative economy in the world. With that, i yield back the balance of my time. Thank you. Without objection, i would like to enter into the record the following material. A letter from the electronic privacy information center, epic. Diversity in block chains initial review of facebooks project, libra. A letter from the independent Community Bankers of america. A letter from americans for financial reform education fund. A New York Times oped written by. The cofounder of facebook in time, it is time to break up this book. Another oped by the same person in the financial times, entitled facebook, cofounder, libra coins which shift power into the wrong hands. With that, i would like to recognize myself in five minutes. Thank you mr. Marcus for joining us. A lot of people are using the word innovation. That is a bit misleading. I think what this is really about is making more money. Owning peoples information. Owning their identification, owning all of which, very much is interconnected with the livelihood of the residents we represent. Mr. Marcus, how, or who pick the first 28 corporations of the Libra Association . Congresswoman, the original 28 members are a result of a wide outreach. And those are the first out of 100. Facebook will not be in a position to pick and choose next members, and will not be involved in the process. This is a process that is now driven and solely in the hands of association. Thank you, mr. Marcus. So, is it anderson . Am i pronouncing it correctly . Yes, congresswoman. Sits on the board of facebook or ka Mark Zuckerberg, co facebook sits on the board of breakthrough initiative. Peter teal is the founder of paypal and the board of, and on the board of facebook. Ben horowitz is the founder of Anderson Horowitz and on the board of lift. Just looking at that, simply looking at the small sample of individuals, there appears to be multiple Close Relationships on facebooks board and across the Libra Association members. Recently, forbes asked the following question. Is facebook forming a crypto mafia, as Libra Foundation members boost each others businesses . Im sorry mr. This distracting. What i simply provided is that anchorage, one of Libra Association founding members, raised funding from visa, who was also Libra Associations founding member. You dont think that that creates a power imbalance for a small group of people to manage a High Percentage of the worlds transactions . Are you worried about undoing influence . Woman, i appreciate your question. I can assure you that the participants up to this point are participants that have joined because they can add value on the network, and provide services that are relevant to the people we serve. Im sure the valuable, mr. Marcus. No one would oppose that they are valuable. But each of the Libra Association companies have investors and shareholders to answer to. So, how do you see them serving two masters and a competing payments world . Congresswoman, we hope that the Libra Network is just a network, and that every Single Company will be able to build services on top of the network the same way that companies build services on top of the internet, and as a result, we believe that conflicts will be limited by that. And the fact that, you know, 100 members by the time we launch, that we hope that we will have many more, and again, and a member of the Labor Association, the group of friends, be voted out by labor users . Congresswoman, no. This is not a currently contemplated. But the way that governance will evolve will allow for that in the future. Mr. Marcus, this is important. The banks and the founding members have a choice to protect their data. But will the unbanked and under banked have to trade their data and privacy to transact . They will not, congresswoman. How is that possible . Because, this is the Payments Network and a payment service, congresswoman. And that consumers will have choices. If they want to use a wallet that is solely in the business of payments, and not in the business of advertising at all, they will have the choice. One of the barriers for the unbanked community, as you probably know, as access to id. Up at the same know your customer, antiMoney Laundering restrictions exist, here, then for the Libra Network, and the wallet, how well this serve the unbanked now . Congresswoman, this is a very important question. Problem of identification for Financial Inclusion. This is something that we are actively working on with the number of outside ngos and others to find the best approach. But, there are a number of people who have the ability to identify themselves, and who are left behind today. And we can serve them today. So that the public managers large crypto currencies, such as bit going, you probably heard, however, with the libra, each Family Member has to pay a minimum of 10 million to join and become a validator or operator. Thus each Family Member joining one, having one vote. How does alisa Libra Association. This is a really important question, congresswoman. The way that we plan to arrive to the right level of diversity and representation is by being very thoughtful at the Libra Association as we add more members toward the goal of 100 or more members by the time the network launches. Thank you, mr. Marcus. Now i would like to recognize a gentleman from wisconsin. Mr. Steele is recognizer five minutes. Thank you. I appreciate being here. I been listening to todays testimony. I appreciate you guys innovating, bringing forward a white paper, having this discussion about how to properly regulate what is a new idea. I think some of the conversation today has drifted a bit, where people are coming after us if you launched this product and now we are upset that you did that without the Regulatory Framework in place. I commend you for the fact that you brought forward a white paper. You are discussing the idea. Were having the conversation today, so we can be ready tomorrow if you choose to move forward with this. In particular, and listening to the discussion today, i think it is clear that libra exhibits characteristics of many different things, for which we have a regulatory construct for. We discussed, shall either break viewed as a currency, edc, money market fund, etc. And whatever concrete institution ultimately emerges, from this first draft of the white paper, i think, and have stated, you dont dispute the fact is some level it is going to be regulated in, and youre open to that. You also signaled that there is deficiencies in the u. S. Regulatory approach, and that was part of the decisionmaking process to locate the Labor Association in switzerland. And not in the United States or silicon valley. And under more clear, u. S. Jurisdiction. For me, if america does not lead in the digital world, others well. And, i am concerned about the values of some of these others might bring to the table. Where i feel confident in the values that the United States regulatory approach will bring. So can i ask you the question . How, not, if, because i think we have answered that, that it should be regulated. But, how should we regulate libra, libra, the Libra Association, to be taught full about this in the concept context to policymakers. Congressman, thank you for the question. There is one important point, which is, the clarity of regulation was definitely one of the factors for switzerland. But one out of many. I do think that we would have had the ability from a Regulatory Framework to do that in the United States. But it is less clear, to your point, what the framework would be. That being said, as far as the libra wallet is concerned, it is very clear. We are registered as a Money Service business with vincent and with treasury. We have state licenses that we are obtaining and continuing to obtain. So there is total clarity there. And i believe that where we need more clarity, is really around the Libra Association and how the reserve is managed. And even for that point, there is just no clear regulation right now, even in switzerland or elsewhere. And this is why the engagement that we are having with the g7 working group, the Financial Stability board and others, the conversation that we are having, we hope will result in some form of oversight, especially over the reserve. Because, this is something that a lot of people have concerns about. I have concerns about ensuring that the commitments are bound by law, when it comes to the reserve. And, that is the commitment we are making, that we will take the time to find and i appreciate that. The reason i am digging another regulatory approaches from a policymaker perspective. I can have influence on is that Regulatory Framework. You have noted a couple of times and you testimony that you dont look to be regulated as a security by the sec. Can i ask you, is there anything specific as it relates to our Securities Laws that concern you by being, if you fell under the regulation in our sec regulation that we should be looking at today to be prepared for tomorrow . Congressman, i dont believe we are a security, because, we are not not know whether or not you are, but remove that. I think that will be debated for days and months to come. But is there anything in the Securities Law that gives you pause, that makes you not want to fall under the how we test you mark certainly. Because, as far as labor is concerned, it is a payment tool, and we want them to be accessible to everyone. This is not going to be an investment. And if it wouldnt, if it wasnt available to everyone, then it wouldnt be able to deliver on its mission. I think that notice helpful about how our security law limits peoples access into some of the Investment Products we have in the United States and have a Significant Impact into the product that you are looking to deliver. Can i ask you . I want to shift gears slightly. One of the areas in the white paper and in the commentary that is out there, i think there may be a real role in countries with unstable currencies. As you look at the global perspective, shifting away from the United States for a moment, i appreciate your time today. I will follow up on you on the topic and i yelled back. The gentleman from massachusetts, mr. Lidge, is recognized for five minutes. Thank you. Excuse me. Excuse me . Thank you. Im not trying to get in the way of your job. But, i do want to say, and i know the gentleman from wisconsin is new, but i would respectfully remind him that that is exactly what facebook did when they came in. Without a Regulatory Framework. Without even a white paper. Thats how they operate. The mantra of facebook was, move fast and break things. That was there mantra when they got into business. They also, will the gentleman yield for a moment . No. Got limited time her. I would add that they also have taken an approach to business that, rather than ask permission, they just apologize later. And that is what they have done over and over and over again with the personal data of their customers. Their current Business Model, and thank you for coming. Is to really use an adhesion contract , 18 pages, that basically authorizes facebook to vacuum up the behavioral surplus. All the information about the users, and then it they sell it. They deploy it on behalf of their advertisers. That is the model that you have. And i am just worried that you are going to use the same model for calibra. What is the terms of Service Agreement going to look like here . Is it going to become you click, i agree, and then all your rights are gone . Is that, because thats the model you have a facebook, right . Congressman, if you give me the opportunity, well, you, really quick. We only have so much time here. First, i do want to defend the advertising Business Model that facebook has. It enables i am asking about calibra. I am asking about what youre going whats the terms of Service Agreement going to look like . Is this going to be another adhesion contract . No, congressman. We will not share data, Financial Data and account data, even with facebook itself, congressman. Okay. You havent had a good record on that. Let me ask you a couple of questions. So, according to pro public, you got about 52,000 data points on every one of your regular users on facebook. Is that right . I dont have the exact answer to that. I think the right. We feel that this, the ability of this to scale is really what the dangers coming. We have got 2. 7 billion customers, when you come in. At the scales and it is designed to scale, right . That we are worried that, and not just us in congress, but jay powell over at the fed. Secretary minh nguyen. They are concerned of the impact on Monetary Policy and the strength of the dollar. Is this something that could be tested in a sandbox environment in a smaller environment, where we dont have to worry about those scaling problems of affecting the economy more broadly . Or the strength of the u. S. Dollar . Congressman, the first point of like to make is that would you commit to doing this in a sandbox environment, so we dont have to worry about the regulatory issues and the privacy issues . We would have a chance to look at your product, this is a product. You got a token here. That way, we will be able to answer some of the regulatory questions. Are you willing to commit to that . Congressman, i commit that we will take the time to address all concerns and to ensure that we do this the right way. In a sandbox environment . Congressman, i dont want to get into thats what im asking. Thats what im asking you for. But my commitment to you is it we will take the time. We will not move fast on this. The commitment that youre going to take your time is not, first of all, is not the way have operated in the past. And it is meaningless. It is meaningless. If i tell you im going to take my time, what is that . What is that . Thats an indication of pace. Doesnt mean youre going to do anything different than we want you to do. And ill just be you know, it looks to me like youre going to, right from day one, youre going to be a systemically important financial institution. So, you should be ready for that regulation coming at you on day one. The way you are operating right now. The lack of transparency. Let me ask you. So, facebook hasnt done privacy very well. Would you commit to accepting fiduciary duty, a fiduciary duty on behalf of the private gentlemen, time is expired. Okay. Thank you. I think that you. Thank you. The gentleman from minnesota is recognized for five minutes. Thank you, madam chair. Mr. Marcus. I have heard some incredibly uninformed comments from members of Congress Today and yesterday. As i am sure you are aware, bit coin is now 10 years old, and now suddenly, magically, congress is responding. In other words, after more than a decade, congress has the errantly started to care. I am glad after all these years, that congress has finally decided to Pay Attention to the technology that could again, just like the internet, upend the way we do everything. In our lives. Unfortunately, some people want to unnecessarily restrict it, or even ban it. They fear change. Nothing has been more clear on this committee than the wind aversion to change that some of our members have constantly espoused. Even when it wasnt required or even the subject of the hearing. I am amazed at how easily representatives from california are so willing to suppress the innovation occurring in their own state. As much as they would like to be a separate country, the benefits those innovations could have for these United States. I dont want to be partisan. This is not a partisan technology. In fact, representative will foster, cochair of the block chain caucus, like myself, has been a long time champion and advocate for these innovations. It has never been a cornerstone of my grandfathers Democrat Party to oppose innovation. Chairwoman waters was in fact, correct, which she began this hearing that merely learning more about an understanding libra does not have to include opposing it. I hope that will be the same approach to understanding the breadth and depth of crypto currency, which libra does not represent, but thankful, thankfully, amplifies our discussion. Of that topic. Unfortunately, mr. Marcus, you and your company have decided to approach this undertaking with as equal a level of ignorance and misunderstanding as those who wish to quell any new developments in crypto currency. I am afraid you have failed to realize that there is much to do in washington in terms of educating both members of congress and regulators on the benefits of this technology. I hope someone whose opinion you value conveys to you how wrong you have been operating. People have concerns with the amount of data you have on them. And now, you want to be there money, too. I hope members of this committee investigate the fact that the people already have options separate from your central control. My colleagues are incredibly fearful of the Money Laundering and criminal activity crypto currencies, but the dollar and all feedback currencies have been proven to be the largest means of illicit behavior and Money Laundering. This does not mean we need to suppress individual freedom. Individuals on the exclusion of middlemen and the freedom of the individual will continue to create open networks, separate from central control. Unfortunately, libra is not designed to minimize middlemen. It in fact, relies on the. At the end of this day, libra resents an Incredible Opportunity to define what it is not. It presents an Incredible Opportunity for everyone on this committee to learn more about actual crypto currency. The committee has already sent out a press release that this is only our first step in regulation of oversight of labor. A lot has been said about the concern that the Payment Systems are unregulated. However, Payment Systems like the one you propose are already subject to regulation by a number of agencies. I think its important that my colleagues have a full understanding of the laws it currently exists, so we may make better decisions here. Treasury has demonstrated by secretary mnuchin on monday regulates Payment Systems for antiMoney Laundering compliance. The ftc regulates them for fraud. Each state regulates them for Consumer Protection, among other things. New york has its own, specific regime and so forth. This regulatory landscape applies to Payment Systems like libra, and is different and distinct from laws that may or may not apply to typical social media platforms. When this hearing was announced, i was optimistic that this was finally the time a Major Company wanted to be involved with this revolution. And that the majority wanted to actually think a lot about these new innovations. It appears, however, they have decided to entrench themselves in the fear of the unknown and the fear of change. And your company has done nothing to allay these fears. As you move forward acknowledging that the buildup in your actions has no constitutional basis, let alone a basis in logic, and that no one is willing to actually put the name of this proposal to ban private innovation, we work with me and invest educational efforts to show these members of congress that we should work to better understand the innovations underlying crypto currency, rather than doing their best to put their head in the sand and ignore change . The gentlemans time is expired. The gentleman from texas, mr. Green, was also the chair and subcommittee on oversight and investigations, is recognized for five minutes. Thank you, madam chair. Mr. Marcus. I am concerned about the dollar. As you know, there is a competition for currency supremacy. The dollar is the preferred currency in the world. The yen competes. The euro competes. And there are others. But, the question i have for you is this. How will this impact the dollar . This is our currency. The dollar is the means by which we have the opportunity to influence the economic order in the world. How will this impact the dollar . Congressman, the first thing i want to state is that we are not competing, or we do not want to compete with the dollar. Question is not whether you want to compete with the dollar. The question is, what impact will you have on the dollar . The dollar is supreme. Do we give up our supremacy because of a crypto currency . No, congressman. And, we are engaged in conversations, notably with the fed and the Financial Stability board to explore how we can ensure that the dollar and Monetary Policy is not influenced at all well, here is a concern. Things tend to metamorphose. Things rarely remain stagnant. We live in a dynamic world. You are starting out with just a small piece of the economy, as it were. We dont know what this will become. Surely, you could understand the consternation of people who are charged with the responsibility of overseeing the fed, which happens to be the means by which we have influenced with our economy in the dollar. So we have this consternation. And i would greatly appreciate it if you could allay some of my consternation with reference to the impact that this may have on the dollar. Congressman, the reserve will be composed mainly of dollars. And we expect that excuse me. Im sorry to be rude, crude, and unrefined. Please forgive me, but my time is limited. You said mainly on the dollar. You said earlier, when testifying in this room, to questions posed by another member, that another country could also buy into the reserve. I believe china may have been mentioned. Is it true that china can buy into this reserve . No, congressman. The current contemplated reserve is to be approximately 50 dollars and a number of other currencies. Euro, pound, yen. Notably. And, euro, pound, yen. And i have indicated to you earlier that we are in competition with the euro, the pound, we would be under competition with it as well. The yen. Thus the japanese currency. We would compete there. Okay you have these other currencies, and you have the dollar. But, the question becomes, how is this going to be balanced so that it doesnt impact the marketplace itself for currency . Congressman, i believe that the use case for libra is such that it will be used mainly outside of the United States. Although it has Real Solutions to real problems in the u. S. As well. And as a result, because of the composition of the reserve, we believe that the influence the inflow to dollars will be important, and as a result, retain the relevance, of course, the dollar. Well, our dollar is a currency that is preeminent outside of the United States. So, saying to me that this is something that will impact things beyond our borders does not i need when my concern is with the dollar, which seems to transcend boundaries