In a detailed defense of Facebook’s Libra coin, Facebook Blockchain lead, David Marcus told lawmakers at the U.S senate; that the social media giant will not have access to personal financial information with its new currency.
Facebook lead David Marcus was responding to a senate banking committee letter that had posed various questions to the social media giant. David went about addressing the questions posed by the lawmakers by acknowledging their concerns and seeking to put them at ease.
“I want to give you my personal assurance that we are committed to taking the time to do this right.”
“Similar to existing and widespread cryptocurrencies such as Ethereum, and Bitcoin, transactions that take place directly on the Libra Blockchain are ‘pseudonymous,’ meaning that the user’s identity is not publicly visible,” which is basically an reassurance that Facebook will be discrete with user information as had been revealed during the Libra project unveiling last month.
Marcus was however clear that the Blockchain addresses, timestamps, and transaction amounts will be public but any anti-money-laundering (AML), and know your customer information (KYC) would have to be stored by the wallet providers.
As a caveat, Marcus revealed that Libra will be an open source platform meaning that any third party will be able to build their own digital wallet. Marcus explained that any third party developer seeking to build on the Blockchain would be responsible for how their Libra wallets are built. He further explained that it would be the responsibility of the third parties to determine the type of information they may require from users, and to comply with the regulations and standards of their respective jurisdictions.
He went on further to add;
“Regulators of Calibra and other digital wallet services can require them to collect information about the identity and activities of their users and make such information available to law enforcement and regulatory agencies, such as for AML, CFT [counter-financing of terrorism], and sanctions purposes.”
While responding to questions about what consumer information the social media giant is already in possession off, Marcus responded that a subsidiary of Facebook which is not related to Libra; stores non-public personal financial information data” in compliance with existing law for transactions. The information though is not used for advertising or personalization. Moreover, the Facebook payments Inc. subsidiary processes these transactions, meaning that Facebook does not have access to any payment information credentials; though it does collect other information to do with the transaction such as date, time, and purchased goods.
Marcus told the senate that the Libra association, which is Facebook’s governing council for the Blockchain network will have even less information than Facebook payments.
Because validator nodes or wallets will process and store transactions, neither Facebook nor Libra will store personal data, he claimed.
Facebook put in place a subsidiary-Calibra- to develop an open source wallet for Libra. Marcus explained that Calibra will safeguard consumer financial data and will not use or share this data for ad targeting purposes.
Facebook’s Libra endeavor has been met by pushback from crypto enthusiasts, such as John MacAfee to regulators and lawmakers. The U.S senate banking committee is set to hold a hearing on the Libra project on July 16, and 17 with Marcus expected to make submissions at both meetings.