Michael Newberg | CNBC
Facebook does not expect his new cryptocurrency project, Calibra, to be a moneymaker immediately, David Marcus, the head of the group, said in prepared comments that were released prior to a Tuesday hearing with US senators.
The company has expressed concern about its cryptocurrency ambitions, following a series of privacy scandals in recent years that have eroded public confidence in Facebook. Marcus has attempted to calm the fears around Calibra by trivializing the financial incentive in the project and instead emphasizing the social mission.
"Our first goal is to create utility and acceptance that allows people around the world – especially the uncoated and unlinked – to participate in the financial ecosystem," said Marcus, who joined PayPal in 2014 and started working on PayPal. the blockchain project of the company last year. He said that Facebook will not make money in the early stages of Calibra and will ensure that customer account and financial information is not shared with Facebook, Inc. and as a result cannot be used for ad targeting. "
Marcus speaks Tuesday for the Senate Committee on Banking, Housing and Urban Affairs. According to his prepared comments, Marcus is focused on addressing concerns about the goals of Facebook with Calibra and cryptocurrencies in general. After a number of crypto-related companies turned out to be scams and investors lost money bets on niche coins, Marcus assures policy makers that Libra, the new currency, is "a payment tool and not an investment."
"People will not buy it to hold as if they would buy a stock or a bond, expecting income to pay or increase in value," Marcus said. "Instead, Libra is like cash, people use it to send money to relatives in other countries, for example, to make purchases."
Facebook is also trying to convince officials that the currency is safe and will work well with governments and currencies around the world.
Policymakers have voiced their skepticism since Facebook announced Calibra in June. Federal Reserve Chairman Jerome Powell said, "Libra is deeply concerned about privacy, money laundering, consumer protection, financial stability."
Facebook has tried to soften the connection between its own brand and the new currency by bringing other companies into the fold. Founding members of the project include 27 other companies and organizations such as Visa, Stripe and PayPal payment companies, as well as technical companies such as eBay, Lyft, Uber and Spotify. Marcus pointed out that Facebook will have one vote as other founding members "and will not be in a position to control the completely independent organization."
Yet Marcus acknowledged that Calibra will help Facebook because it will make transactions possible for the many users of the platform.
"We expect that the Calibra wallet will immediately be more cost-effective for Facebook because it will enable many of the 90 million small and medium-sized businesses using the Facebook platform to trade more directly with the many Facebook users that we hope they will result in consumers and companies that use Facebook more, "said Marcus. "That increased usage is likely to generate more advertising revenue for Facebook."
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