David Marcus, head of Facebook’s Calibra wallet spoke at the Money 20/20 conference about what Libra is trying to forge and their commitment to a ‘noble’ vision. The narrative that has recently been doing the rounds is that of Libra establishing a monopoly over the financial system. According to Marcus, this is completely out of context, and Libra wants to work with banks and other existing financial institutions to simply build new payment rails on the internet, as reported by Finextra, October 29, 2019.
Strong AML and KYC in Focus
Regulators have turned a cold shoulder to Libra, and their reason for doing so is supposedly predicated on the poor AML procedures in place and Facebook’s past with data management. But David Marcus says that Libra has mandatory KYC and AML measures as a prerequisite to onboarding.
Here’s the problem: managing money laundering within the bounds of a country has alone proven to be a Herculean task for regulators. When you take this scenario and make it global, as opposed to restricting the money trail domestically, it becomes orders of magnitude more complicated to deal with it.
David Marcus says he understands the concerns around a completely new payments standard, but the Libra Association is committed to working past these differences to establish a mechanism whereby regulators can seamlessly audit transactions over Libra while customer payments become more efficient and manageable.
If you really think about it, the similarities between Libra and China’s CBDC are uncanny. This time, instead of using the public’s data to benefit themselves, Facebook will use it to help governments strengthen their surveillance capabilities.
Why This is Concerning
As David Marcus spoke on the broad topic of money laundering and regulation, he revealed that Libra intends to give governments full access to the network. This will allow them to continuously audit the network, instead of relying on potentially biased reports from the Libra Association.
This goes to show Libra is a danger to individual privacy. Libra’s hunger to become the next big thing in the financial sector has them conforming to every government command and effectively abolishes the little bit of financial privacy that the people still have.