Facebook said in a prepared statement Tuesday that it will halt the release of its cryptocurrency project Libra until it is approved by the U.S. government.
Facebook CEO Mark Zuckerberg is set to testify before the House Financial Services Committee Wednesday about the project, and released his statement prior to the testimony.
“Ahead of tomorrow’s inquisition, Facebook has shared Zuckerberg’s prepared statement. In it, Zuckerberg admits that Facebook is ‘not the ideal messenger right now’ and promises that Facebook will not move forward with Libra anywhere in the world until US regulators approve,” Engadget said.
The full statement can be found in the U.S. House Committee repository, which appears to be down at the time of this writing. However, Engadget published some samplings from the statement.
“Over the long term, if it means more people transact on our platforms, that would be good for our business,” the statement reportedly said. “But even if it doesn’t, it could help people everywhere.”
Facebook’s goal for Libra appears to be to establish a cashless, worldwide digital currency, which has obvious totalitarian implications, given that Facebook already has a propensity to ban conservatives or those whose speech they find to be offensive. Will those who have been banned from the platform lose access to their digital wallet? That is one of many questions that should be answered before Facebook is allowed to proceed with this project.
But Zuckerberg is set to testify that “Facebook is not looking to create a sovereign currency,” according to the Engadget report. The currency is supposed to be governed by a non-profit organization called the Libra Association, which is headquartered in Geneva, Switzerland and reportedly independent of Facebook.
“Like existing online payment systems, it’s a way for people to transfer money,” Zuckerberg said in the statement.
This latest speed bump is one of many faced by the tech giant in creating its own cryptocurrency. Several tech companies had joined up with Facebook to be “founding members” of the project, investing $10 million each in Libra. But many of those companies have backed away from their original commitments.
Several more “founding members” of Facebook’s cryptocurrency project Libra have pulled out of the program ahead of the first board meeting for the currency’s governing body Monday.
“Stripe and eBay have followed PayPal in backing out of Facebook’s cryptocurrency, Libra,” Engadget said. “They confirmed to the Financial Times that they would pull their support, while Mastercard and Visa have also dropped out.”
It is unclear why the companies pulled out of the project. They provided ambiguous explanations for their behavior. But David Marcus, the lead executive on the Libra project, expressed his disappointment in some of the companies that stepped away.
While he thanked Visa and Mastercard for participating, he sent a cryptic message about pressure and threats in relation to the project.
“I would caution against reading the fate of Libra into this update,” he said. “Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.”