Mark Zuckerberg, CEO of Facebook testified before the United States House of Representatives Financial Services Committee today regarding Facebook’s Libra Stablecoin project.
Libra vs Digital Renminbi
The hearing on Oct. 23, before Congress, the CEO and various lawmakers discussed the possibilities of competition with China and its impact geopolitically as well as globally.
In his prepared statements to the Committee, Zuckerberg stated that the project would ensure that the U.S. stays a financial leader globally:
“China is moving quickly to launch a similar idea in the coming months. We can’t sit here and assume that because America is today the leader that it will always get to be the leader if we don’t innovate. Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership as well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed.”
Representative Patrick McHenry asked Zuckerberg regarding China and the rise of technology companies within it to which the CEO replied: “Today, six out of 10 of the top tech companies are coming out of China and certainly don’t share our values.”
Concern For Analysts
Representative Andy Barr discussed the potential threat of China’s digital renminbi with its involvement in the Belt and Road Project. It’s an initiative that was launched six years ago and is a global development strategy adopted by the Chinese government that involves infrastructure development and investments across the globe.
Speaking to the press following the event, Committee Chairwoman Maxine Waters said regarding China:
“I believe that we are big enough, we are strong enough and we are smart enough to meet the needs and to be competitive in the world, we just have to keep going.”
RBC Capital Market analysts suggested that holding back Facebook Libra, might open up possibilities for China’s central bank digital currency to dominate globally. The analysts of RBC presume that Facebook Libra stablecoin plans urged China to develop its own yuan backed digital currency.