David Marcus, now head of Facebook Financial, or F2, testified during a Senate Committee on Banking, Home, and Urban Affairs hearing on Capitol Hill in Washington, DC on July 16, 2019 about Facebook’s proposed digital currency, previously called Libra was known. The cryptocurrency was renamed Day in December 2020.
Saul Loeb | AFP | Getty Images
Facebook should get the “benefit of the doubt” from regulators when it comes to launching the cryptocurrency it supports and its digital wallet, the company’s head of financial services said on Monday.
David Marcus, the head of Facebook Financial, also known as F2, is hoping that both the Diem cryptocurrency and the social networking company’s Novi wallet will hit the market next year.
“I hope we can work with … Novi and Diem and the big changes of 2021 until the regulatory approvals are in, where we need to get them,” said Marcus at the Singapore FinTech Festival, moving on to a question about the largest Changes in financial services in the coming year.
Facebook’s cryptocurrency project has been a roller coaster ride since it was announced last year, heavily criticized by regulators, reduced by ambitions and renamed.
The cryptocurrency was originally called Libra and was supposed to be managed by a non-profit consortium made up of several companies called the Libra Association. Facebook had planned to launch a wallet called Calibra that would allow users to send this cryptocurrency to one another.
A Libra coin was originally supposed to be covered by a currency basket. However, regulators raised a number of concerns about the impact the Libra could have on financial stability, privacy and money laundering issues.
In April, the Libra Association scaled back its plans, saying it would offer stable coins backed by only one national currency rather than a single multi-currency coin.
And last week the Libra Association changed its name to Diem Association. Earlier this year, Facebook changed the name of its Calibra digital wallet to Novi.
Last month, the Financial Times reported that the Diem cryptocurrency was preparing to launch as early as January, citing three people familiar with the matter.
The Diem Association is currently awaiting approval from the Swiss Financial Market Authority as the organization is based in Switzerland, the FT reported.
Marcus was not specifically interviewed about this report during the course of the panel.
Although Diem is described as a cryptocurrency, it’s not like Bitcoin, which is perhaps the most famous digital coin. Behind it is a central organization, which Bitcoin doesn’t do. It is also supported by the fiat currency, which in turn is different from Bitcoin.
‘Leap of faith’
The Facebook executive pleaded with regulators, who have heavily criticized the company’s cryptocurrency efforts, to give Diem and Novi a chance.
“I don’t think we’re just asking for immediate trust. I think … what we’re asking is at least to have the benefit of the doubt,” said Marcus.
He argued that Facebook could have built the cryptocurrency in a “closed way” to only make it available to users of WhatsApp and Messenger, two apps the company owns. Instead, the social network has formed a consortium with other companies.
“I think you will have a hard time finding a company that has done this in recent history by actually building something, investing a significant amount of resources, and then saying, ok, we’re going to give up our power here and It’s us.” I’ll try to make it as open as possible and basically tie one or both hands behind our backs when it comes to enabling competition for exactly what we’ve created, “said Marcus.
“I think all of these things that we have done – which have created all sorts of complications in the implementation of this vision – are, in my opinion, a good reason to give us the benefit of the doubt about our intentions and our plans here to do. “
The urge to bring Diem and Novi to market comes at a time when central banks are also exploring their own digital currencies. China has already started some real trials with a digital yuan.