Rep. Maxine Waters (D-CA) says she was “absolutely not” reassured by Facebook CEO Mark Zuckerberg’s Libra testimony during a six-hour hearing on Wednesday.
“The only thing that he said that I agree with is that he will not launch Libra until the regulatory agencies say that they are ready to give some oversight to it,” Waters told Yahoo Finance.
During the marathon hearing, Zuckerberg repeatedly said that Facebook (FB) would not be involved in a Libra launch until U.S. regulators are on board. He also told the House Financial Services Committee he believes Facebook would likely walk away from the project if the independent Libra Association decided to move forward without satisfying American regulators.
“Right now, my understanding is that everyone [in the Libra Association] is aligned on making sure we have U.S. regulatory approval to launch anywhere in the world. And that’s the goal and that’s the plan,” said Zuckerberg.
‘I believe in innovation, but it’s got to be right.’
Zuckerberg warned lawmakers that China is working on ideas similar to Libra. He — and some lawmakers — stressed that if the United States doesn’t lead on this front, China will.
“I just think that we need to...weigh any risks of a new system against what I think are surely risks if a Chinese financial system becomes the standard in more countries,” said Zuckerberg.
Waters told Yahoo Finance she’s not worried about China.
“I believe that the United States is strong enough, that we have enough people who are smart about this kind of innovation — including, maybe even Facebook and the Libra project,” said Waters. “I'm not worried about our ability to be competitive in the world. I think we can rise to the occasion, I believe in innovation, but it's got to to be right.”
Throughout the hearing Republican and Democratic lawmakers pressed Zuckerberg on Facebook’s credibility and trustworthiness. Zuckerberg acknowledged “challenges” over the past few years and that the company has work to do. In his opening remarks, the CEO admitted Facebook was not the “ideal messenger” for launching this kind of payment system.
Yahoo Finance asked Waters if she’d be more open to the idea of Libra if a different company were leading the effort.
”They have been charged with housing discrimination. We’re concerned about diversity and inclusion. So there are a lot of concerns,” Waters said. “They have so much data that people have got to be concerned about privacy issues, on and on and on. And so, it's not a matter of which company it is. It's your history, it's your background, it's where you're coming from. All of that, I think, has to be taken into consideration.”
Waters said there is still a lot of work to be done and questions to be answered before Libra could become a reality.
”I do not really understand the Libra Association from Calibra, from Facebook,” she said, referring to Facebook’s planned digital wallet for Libra, the actual cryptocurrency. “And I think we really do have to know what the relationships are, where the decisions are being made, who has the power and where's the money going.” When Facebook announced Libra in June, it also announced 28 “founding members” in the Libra Association, the separate governance group set to be headquartered in Switzerland. Several members of the association, including MasterCard, PayPal, eBay and Visa, have recently said they’re leaving the group.
The committee has now heard from both David Marcus, Facebook’s head of Calibra, and Zuckerberg. Waters said the committee will continue to follow up with Facebook and engage with regulatory agencies about Libra.
Ultimately, it seems Wednesday’s highly anticipated hearing on Capitol Hill did little to win over critics or improve Libra’s chances of a 2020 launch.
“I have no idea what the future timetable would be, if in fact it gets done at all,” said Waters.
Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.