When the pie fell below $7,500, Zuckerberg was being mobbed by members of Congress.
At 10:00 U.S. time on October 23, the U.S. House of Representatives Financial Services Committee held a hearing on Libra, and Facebook CEO Mark Zuckerberg attended as the only witness.
After 18 months, Zuckerberg returned to the hearing site, the theme of this hearing is "examining Facebook and its impact on financial services and housing industries." But the real focus of this hearing is Facebook's cryptocurrency project Libra.
On the eve of the hearing, Libra was faced with the dilemma of partners withdrawing one after another, and regulators from various countries continued to exert pressure. Zuckerberg's battle at the hearing was also considered Facebook's desperate fight for Libra.
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In 6 hours, 47 congressmen took turns to attack, Xiao Zha was so nervous that he forgot the question
At 10 o'clock, the live broadcast of the hearing officially began.
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(Live Screenshot)
In the last hearing, Zuckerberg's performance exceeded everyone's expectations. He skillfully responded to the torture of 44 congressmen. Even under the worst privacy leak incident, Xiao Zha still had a wave of fans. In just 5 hours, he won back word of mouth for Facebook, and also made Facebook's stock price, which had been sluggish for several days, soar rapidly and recover.
In the United States, regulators have never been friendly to Libra. Numerous hearings about Libra have been held long ago, but Zuckerberg has never shown up before. This hearing is the first time that Zuckerberg Gaining confidence for the Libra project in front of MPs.
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(On the eve of the hearing)
Debate Competition"Debate Competition"Kicked off.
Maxine Waters, chairman of the U.S. House of Representatives Financial Services Committee, opened the opening by saying that Libra is a digital currency that challenges the dollar. She reiterated that Facebook should immediately suspend Libra development until all questions are answered.
Each of the 47 congressmen has 5 minutes to talk to Zuckerberg. This time, the congressmen Xiao Zha faced no longer "prevaricate" with old and far-fetched questions, and everyone came prepared.
Some congressmen solicited questions about Libra from netizens on Twitter in advance; some congressmen only allowed Xiao Zha to answer "yes" or "no" to controversial questions after a long discussion; some pointed out the pain points of Libra, Saying that Facebook can't be trustworthy to hand over emails or even phone numbers, let alone hand over money to them, Xiao Zha was speechless when asked in one sentence.
Under such a tense and tight agenda, Xiao Zha also answered the questions of the congressmen with a serious face, but he couldn't hide his nervousness.
In the 34th minute after the hearing began, Xiao Zha was silent for a few seconds while answering the questions from the congressmen. Then he smiled and said that he had forgotten the questions of the congressmen. Unexpectedly, he hit the smiles of the congressmen and the audience on the spot. point.
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China is portrayed as an "imaginary enemy", and Libra is located in Switzerland, causing dissatisfaction among lawmakers
Although the topic discussed in this hearing is not limited to Libra, in the pre-disclosed Zuckerberg hearing testimony, the most prepared content of Zuckerberg is still related to Libra.
middlemiddleChina is moving quickly to promote projects similar to "Libra".
Zuckerberg emphasized that Libra, the Facebook-backed cryptocurrency, will enhance America's financial leadership and help the United States export its democratic values around the world.
In fact, Zuckerberg really wants lawmakers to regard China as an "imaginary enemy" and force them to make decisions about Libra. The lawmakers were also hooked, and they all seriously considered the threat China posed to the United States, which became one of the hot topics of the lawmakers in the hearing.
When a congressman asked which countries other than China are currently exploring the field of digital currency, Zuckerberg did not list the cases of other countries, but instead mainly pointed the finger at China.
Zuckerberg responded:“Chinese companies will be the main competitors. I have every reason to doubt that such a project will affect American leadership in the financial field and our ability to enforce sanctions around the world. If China’s financial system becomes more and more If the standards of many countries are not met, it will be difficult for us to implement sanctions and various protection measures in the future.”
Subsequently, Zuckerberg also sold "anxiety" for the congressmen. He said: After the release of the Libra white paper, China also immediately experimented with the digital version of RMB, and plans to launch it in the next few months as part of the Belt and Road Initiative. .If the United States does not innovate, its financial leadership cannot be guaranteed.
"I just think that if we don't innovate, there is no guarantee that we will continue to have the same rules and maintain the same influence in the world in the future. As a country, we need to innovate." Zuckerberg said.
Innovating for the outdated financial infrastructure in the United States, consolidating the status of global financial leaders, and promoting the financial development of the United States are the vision of Libra in Zuckerberg's mouth.
Libra claims that its innovation is to help the United States, but it has its headquarters in Switzerland. In this regard, many members of the House of Representatives expressed strong resistance.
Patrick McHenry, vice-chairman of the House Financial Services Committee, spearheaded the question about the Libra company's Swiss location: "Why is a blockchain-powered digital currency being developed in Sweden?"
Zuckerberg responded lightly: "The Libra Association chose Switzerland because the local system is more forward-looking."
Patrick McHenry was obviously not satisfied with this answer. After Xiao Zha finished speaking, Patrick McHenry bluntly said that I prefer (Libra) to stay in the United States instead of going to Switzerland. We need to understand what this is, and we need to get it under control.
Mr. Gooden shared the same view as Patrick McHenry. He said: "Combining the current situation, including you also mentioned that you are willing to comply with US regulatory approval, I think if Facebook really wants to achieve such innovative measures, why not bring Libra to the market?" How about going back to America?"
Another congressman was even more blunt: "If you want to abide by our rules, why do you go to Switzerland? Honestly, you are a big player in this battle. If you decide to bring this thing to the United States, it is completely okay. of."
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I don’t want to be the Facebook version of Alipay, but I want to hold tight to the US regulatory thigh
At this hearing, there was also a discussion on whether Libra needs to be decentralized in terms of supervision.
Patrick McHenry, vice chairman of the House of Representatives Financial Services Committee, believes that China has successfully produced convenient digital payment software such as Alipay and WeChat Pay. He asked Zuckerberg why he did not make a Facebook version of Alipay to solve the problems that Libra wanted to solve.
Zuckerberg explained that he saw other competitors around the world creating their own payment platforms,The reason Facebook isn't doing this is because Facebook thinks America's financial infrastructure is outdated。Libra, on the other hand, is a project trying to help rethink the foundations of the modern financial system, rather than building on an outdated system.
This is actually a discussion about whether Libra should be decentralized or not. The reason why the launch of Libra was able to shake the Internet circle and the currency circle is that it is more full of people's expectations for a decentralized system. But lawmakers don't quite share the same view.
Some lawmakers believe that it may be simpler if Libra is only linked to one currency, the U.S. dollar, while Zuckerberg considers that such a solution is simple, but it is certain that if Libra is 100% linked to the U.S. dollar, Libra will be in other countries. Place might not be that popular.
When asked about Facebook’s stance on decentralization, Zuckerberg’s answer was full of positive energy:If decentralization cannot meet the highest protection standards, maintain financial stability or combat terrorist crimes and fraud, then we will not create a decentralized thing. We want to work with regulators to make sure we build products to the highest standards.
Looking back at Zuckerberg's speech throughout the hearing, he repeatedly reiterated that Libra products, even a part of them, will not be released until they have the full support of US regulators.
In addition, Zuckerberg also made an additional promise that if the Libra Association wants to issue Libra without the approval of US regulators, Facebook "will be forced to leave."
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After 6 hours of tit-for-tat confrontation, MPs still do not pay the bill
Even if it is so proactively close to the regulatory requirements, Libra still failed to deliver an answer that satisfies everyone.
At the end of the hearing, the lawmakers also concluded sincerely: It is important to encourage innovation in the United States, and it is also important to create a regulatory environment so that we can innovate here, especially in digital currency and new Money transmission methods, etc.
But then CNBC reported relatively negative news. According to CNBC, after Zuckerberg submitted his latest testimony, lawmakers are still as worried about Libra as usual. Several lawmakers said in interviews after the hearing that they did not see much progress.
Lawmakers from both parties in the House expressed displeasure with the lengthy testimony. Members of the House Finance Committee said they hadn't seen much progress (with Zuckerberg testifying).
Patrick McHenry said: "Frankly, I'm not sure we learned anything new here." Several other members agreed.
Chairman of the House Financial Services Committeeseats"We need to get together and basically look back at what happened today and make some decisions about how to execute on that strategy," Maxine Waters told CNBC.
Maxine Waters also stated that she does not support the plan at all, does not understand what Libra wants to achieve, and that the project has not been "fully explained."
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Attachment: Ten wonderful speech moments of Xiao Zha's hearing
1、Libra is not intended to replace sovereign currencies, will expand US financial leadership
According to Zuckerberg’s testimony, China is moving quickly to come up with similar ideas in the coming months. Libra will be primarily backed by the U.S. dollar and will extend U.S. financial leadership. Libra is not an attempt to create a sovereign currency. Like existing online payment systems, this is a way for people to transfer money.
2、The proportion of dollars in the Libra reserve is not sure whether it will be 50%
Lawmakers ask: How does Libra avoid weakening the dominance of the dollar?
Zuckerberg: Because Libra's reserves will be primarily in U.S. dollars, I think such a project could prolong America's economic leadership. However, it has not yet been determined whether the proportion of U.S. dollars in the Libra reserve is 50%.
Question from MPs: What do you think of the founding members leaving the Libra Association and why did they leave?
Zuckerberg: I think it's because it's a very complex, risky project that goes through a lot of scrutiny.
4、Libra is a payment system, not a bank or a currency
Members asked: What exactly are Libra and Calibra? Are they banks? Or is it a currency?
ZUCKERBERG: Senator, I think Libra is just a payment system, it's hard for us to get rid of the dollar right now, and as we've talked about in a lot of places, we're not trying to weaken the dollar, we're looking to expand America's financial leadership .
MP: So Libra is not a currency?
Zuckerberg: It's a payment system.
Congressman: Libra is the currency built into the Calibra wallet, just like I keep my money in the bank.
Zuckerberg: You can think of it that way, but we're not a bank.
MP question: Would you be willing to stop the project if you couldn't see it developing?
Zuckerberg: If such a situation really occurs, Facebook will choose to give up, but Facebook does not have complete decision-making power. Whether the project will continue is determined by members of the Libra Association.
6、Libra Association is Hiring a New Independent Chief, David Marcus Is Not on the List
Zuckerberg: David Marcus is running Calibra, but not Libra. The Libra Association is recruiting a new independent head, and Marcus will not appear on the recruitment list of this independent head.
7、Free Libra transactions are a vision, but Zuckerberg did not confirm that Libra transfers are free
Members asked: If Libra is fully implemented as a global stable currency, will its transaction transfer be free? Can Facebook do it without charging any fees?
Zuckerberg hesitated for a moment and did not give a clear answer of yes or no. He said: This is our vision, but the actual implementation of Libra will involve international rules.
8、Libra is anchored to a basket of highly liquid currencies, in contrast to most banks
Congressman's question: There is a man named Bernard Madoff who once put on an air of success and is now serving 150 years in prison. His Ponzi scheme involved a whopping $64.8 billion. Then the pro-free market people join this Ponzi scheme because they call themselves "laissez-faire". But once they lose their money they come to court, hoping to catch the perpetrators. So, that's why we have to care if you're a second Bernard Madoff. When things go wrong, we are the ones who make it right. But I want to commend you for being an innovator.
Zuckerberg: There are two processes. The first is what we and other association members are doing, which is to design systems to eliminate those risks. The second is to work with regulators on their concerns to ensure compliance. The key part of this is that Libra is anchored to a basket of highly liquid currencies, which is in contrast to the way most banks use fractional reserves, because of the possibility of bank runs. We need to work with regulators to address their questions and concerns and ensure that Libra operates under the strictest financial stability conditions. So we don't start without approval.
9、If Libra was only pegged to the dollar, it might not be as popular elsewhere
Members asked: Would it be easier to make this digital currency into a digital token of the US dollar?
Zuckerberg: My understanding is that society is pretty divided on this point. From a U.S. regulatory standpoint, it would indeed be much simpler, because we're trying to build a global payment system that works elsewhere. But to be sure, if Libra were 100 percent pegged to the dollar, it might not be as popular elsewhere.
10、Promise not to provide any other anonymous wallet for Libra, Calibra can cooperate with regulators
Members question: Will you promise not to provide any other anonymous wallets for Libra?
Zuckerberg: We are trying to build a safe, secure alternative, and we believe that digital payment needs to have the same or better standards on AML and CFT than all other world-class payment systems. I want to guarantee that Facebook will do what you say and our wallet will have a strong identity to work with regulators. I can't speak for the entire Libra Association, but you have my commitment to Facebook.
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