CRYPTO MOVERS AND PRICES
CRYPTO STORY OF THE DAY
Yesterday, Mark Zuckerberg Testified In Front Of The House Financial Services Committee - During The Hearing, He Reiterated That Libra Would Require All Relevant US Regulators' Approval To Receive Facebook's Support And Essentially Admitted The Company Had Erred In Presenting The Payment Network As A Currency Solution
Members of Congress took the opportunity to not only grill Zuckerberg on Libra but go after any particular issue they had with the Facebook platform. About 50% of the time, members' questions focused on targeting and fact-checking on advertisements. Interestingly, Democrats are generally far more vitriolic when discussing FB as they continue to play up the narrative that the company was complicit in allowing Russia to meddle in the 2016 Presidential election. When focus did shift to Libra, there was a broad range of opinions within the House. Republican Representative Patrick McHenry once again showed himself to be the most knowledgeable and balanced out of the group, essentially supporting FB's quest to innovate but implying they had a series of missteps in their launch to lead them to this point. Democratic Representative Brad Sherman, who famously called for the US to quash cryptocurrency, saying their sole purpose was to compete with the reserve status of the US Dollar, was the most vitriolic in reference to FB's currency plans. In one of the most aggressive episodes of the day Sherman claimed Zuckerberg was using the idea of helping the economically disenfranchised as a shield in building tools for the black market.
Crypto Takeaway: While Zuckerberg did not outright say that FB had made mistakes in their handling of the Libra launch, he moved so far away from the initial narrative that he may as well have. While Libra was clearly presented as a cryptocurrency in the whitepaper, marketing, launch etc... Zuckerberg outright said, 'I don't consider this a currency I consider it a global payment network.' McHenry, astutely, asked Zuckerberg why he went down the currency route, why not make an AliPay competitor? This was also our biggest question and Zuckerberg's answer, which was essentially that AliPay receives much more support for such initiatives from their Government didn't quite make sense to us. If you're not getting support from your Government for a payments network, why would presenting your payment network in a crypto-wrapper make it any better? We have said throughout that if FB had indeed presented this as an AliPay competitor, which seems now to have been their intentions and left crypto aside this process would have gone much more smoothly. Zuckerberg confirmed that he would require every relevant US regulator's approval before FB would support the Libra Association. Considering that could legitimately be upwards of 20 regulatory bodies requiring convincing, we believe it's safe to say we will not see a Libra launch that involves Facebook in the foreseeable future.