Blockchain Week in Review – October 2019 #2 | Perkins Coie

U.S. Developments

Mark Zuckerberg Testifies Before U.S. House of Representatives Regarding Libra

On October 23, Facebook, Inc. CEO, Mark Zuckerberg, testified before the House Committee on Financial Services regarding Facebook’s efforts to launch Libra, a blockchain-based payments system.  Mr. Zuckerberg’s testimony described Libra as a tool for financial inclusion, which would also comply with relevant U.S. regulatory requirements.

Early in his testimony, Mr. Zuckerberg promised that Libra would not launch anywhere in the world until it had received approval from regulators in the United States.  Later, he asserted that Facebook would be willing to quit the Libra project if the product launched prior to receiving regulatory approval.  Mr. Zuckerberg also addressed concerns related to consumer protection over the financial information generated via the Libra network.  He said that Facebook was in the process of building compliance systems for the Calibra wallet application.  He also noted that Facebook was building out strong consumer protections, customer support, and password recovery services designed to ensure that Libra met or exceeded consumer protection standards.

At several points during his testimony, Mr. Zuckerberg emphasized the threat posed by China’s government-supported stablecoin project.  Mr. Zuckerberg said that the United States would be relinquishing its influence online—particularly regarding online payments—if China’s stablecoin becomes widely adopted.  He emphasized that unlike the Chinese stablecoin, Libra would be collateralized primarily by U.S. dollars.

Please click here for the opening statement.

Draft Bills for Stablecoins Proposed in House Committee

On October 22, Representative Sylvia Garcia (D-Texas) introduced draft legislation entitled “Stablecoins are Securities Act of 2019” to the U.S. House Committee on Financial Services that seeks to regulate stablecoins under the Securities Act of 1933…

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