first, at the libra association itself, libra association will be based in switzerland but will still rebellinger is with fincen and as a result will have an e-mail program and will have guidelines for all the members to enforce the right kyc, aml standards. as far as the calibra wallet is concerned, for every account opened, we will insure everyone kyc's appropriately, and we'll have very strong e-mail programs. >> okay, what about this, mr. marcus? currently, the full responsibility to file suspicious activity reports are on our banks or other money service businesses which law enforcement uses to investigate and prosecute criminals. and in your july post, you spoke only after the ability -- of the ability for these law enforcement and regulators to conduct their own analysis of off the chain activities. so do you feel that this represents a shift away from libra's own responsibility to monitor and enforce anti-money laundering or can customer protections? >> no, congressman. the reason i wrote this is that that the approach that libra is taking is using a block chain, and block cha

the first is the libra association and believer association will naturally not have oversight. or decision-making around how libra can be used as long as it's lawful uses. and then the second part is that the wallet and my commitment to you is that as far as policy comes, we will be very thoughtful and we will share these with you when we get closer to finalizing the policies that are specific to the libra wallet. >> when you said you were talking about part one, the libra association to be differentiated from calibra, you said if it's lawful so i think you pointed this out but if it's lawful, it should be able to use, you should be able to use libra and not the whims of the ideology of facebook. my concern is that you're going to let hearings like these where you get or you get nailed on national tv and let that inform decisions about how you do business with, similar to financial institutions that have that right where you did. we trusted facebook with our data and it failed so i'm concerned that without the proper protocols in place, people should pause for trusting libra wi

the first is the libra association. and the libra association will naturally not have oversight or decision making around how libra can be used as long as it's lawful uses. and then the second part is the calibra wallet and my commitment to you is that as far as policies comes we will be very thoughtful and we will share these with you when we get closer to finalizing the policies that are specific to the calibra wallet. >> thank you and when you said you were talking about part one, the libra association to be different from calibra, you said if it's lawful. i think mr. duffy pointed this out, if it's lawful you should be able to use libra and fought the whims of the ideology of facebook. my concern is that you're going to let hearings like these where you get hooked or nailed on national tv and let that inform decisions on who you do business with, you don't do business with, similar to financial institutions. we trusted facebook with our data and they failed, so i'm concerned without the proper protocols in place peo

, the libra association, ca libra and facebook all interact. what consumer protections will apply and potential implications for consumers with respect to financial loss from fraud or the project's failure. how individuals' data will be protected and how individuals' privacy will be preserved. how the libra ecosystem interacted with the bank and other existing money laundering protections. and the steps that could be taken preemptively to mitigate risks. despite uncertainties facebook stated goals for the payment system are commendable. according to the world bank, 1.7 billion adults remain unbanked. but two thirds of them own a mobile phone or otherwise have access to the internet. if done right, facebook's efforts to leverage existing and evolving technology and make innovative improvements to traditional and non-traditional payment systems could deliver material benefits such as expanding access to the financial system for the underbanked and providing cheaper and faster payments. still, libra is based on a relatively new and continuing evol

libra association itself has the makings of a cartel. there's already talk about giving discounts among the libra members, for sure going to be used to advantage those that are inside and disadvantage those who are on the outside, under the leadership of the dominant member of the cartel, facebook. we have a long tradition in the united states of separating banking and commerce under the bank holding company act. that is expressed a lot of wisdom, protected us from a lot worse financial crises, and we need to apply those principles going forward. second, big concerns about consumer protection. inherent in the libra proposal, the idea that you are going to make no interest loans as a use tore facebook. -- user to facebook. the idea you can adopt foreign exchange currency risk, big problems. new facebook libra ecosystem, massive consumer protection problems as you have a global privatized orderless currency. what happens when you get that payday loans they are bragging about, you just didn't realize it was from ukraine. the choice of law b

, the libra association and facebook will interact. what consumer protections will apply? potential implications for consumers with respect to loss from fraud or project failure? how individuals will be protected and how privacy will be preserved? how the libra ecosystem interacts with the bank secrecy act and other existing anti-money laundering regulation and ways libra could threaten financial stability and the steps that could be taken preemptively to mitigate risk? despite uncertainties, facebook's stated goals for the system are commendable. according to the world bank, 1.7 billion adults remain unbanked. 2/3 of them on a mobile phone or have access to internet. if done right, facebook's efforts to leverage existing and evolving technology and make innovative improvements to traditional and nontraditional payment systems could deliver material benefits, such as expanding access to financial systems for the under banked and providing cheaper and faster payments. based on aa is relatively new and continuing evolving technology in w

if libra was used for a similar transaction, would the libra association, the group that validates libra transactions, freeze the assets of such sanctioned individuals? >> senator, first i really want to stress the fact that if we don't lead others will and as a result the transactions that you highlighted and listed will happen on a network where we will have no jurisdiction and no reach and no ability to have any -- exert any control for national security purposes. as far as libra is concerned, naturally because libra despite the fact that it will be headquartered, will be registered with fin sin, we will collaborate, we will have an aml program and will ensure that on and off ramps are properly regulated and as a result those types of activities should be extremely hard to -- >> but my core question is being -- having that individual identified to you, the type i just described, would you freeze the assets of such a sanctioned individual under your system? >> senator, the way that this would happen and the way that the system is currently contemplated, it would be the role of the big

sanctions that libra can? >> i'm saying we are here and we are engaging with the libra association. we will have strong programs as walletsfrom all of the operating here in the united states. full enforcement of sanctions and then some. >> libra could have significant .eopolitical this product leaders could penalize users. how are you establishing appropriate human rights safeguards as you develop libra platform? one of the driving forces of the association, being financial inclusion, we will have the right representatives around the table. >> which specific organization? your folks cannot answer that to us yesterday when i asked. which ones are you working with to address potential human rights impacts? >> we have mercy corps, women's world banking who are already founding members of the association. there will be more organizations that are dedicated their lives and energy in addressing the very problems you are raising. >> i am curious to understand how you think the libra will theract with section 230 of communications decency act that prevents state and local law enforcement fr

the head of policy communication has asked how libra would react with the libra association in order to comply with the sanctions laws. the response the association won't interact with any jurisdiction that will leave that to the entities that have an on and off ramp to the currency. can you clarify? how are we supposed to address one - - address this issue with sanctions laws quick. >> this is a question we are engaged with the treasury department. the one thing we estimated as we will respect the travel rule and as a result perform the right checks. as a result perform the righ . . . . those who are subject will of course perform those functions. >> i know my time is up. if i have further questions i will some of those for the record. >> senator kennedy. >> i'm going to move fast i apologize and if advance to find her p. i will agree with the comments that senator may. we need to encourage innovation. i want to explore the underpinnings of labor. can we agree that a bigger a bir should be honest. >> yesterday. >> a banker should respect to customers privacy. >> yes of course, you'r

the reality is if you look at the current composition of the libra association of members, those are mostly american companies. calibra is an american subdued of america,ue every and will be operated in the u.s.. i think the beneficiaries, in terms of companies of the libra network will likely be american companies under the american jurisdiction with proper regulatory oversight in the u.s. proposali think the has huge potential, and i think the challenges for the transaction of the exchange for services and so forth, today, still has lots of obstacles to be overcome, including that of security and privacy. nonetheless, we look forward to observing and participating in this because i really do think it is the wave of the future. as senator tillis said, we are either going to be responding to it or actively involved and running from it. thank you. senator cortez? senator: thank you very much. we appreciate you being here and answering the questions. this is obviously very innovative for all of us and exciting. have a couple of questions if you thought through some concerns many of us

the libra association. and they're doing something very different. they're creating a new currency that is intended to be used by billions of people. and i think there are lots of questions that you still need to answer regarding that structure. i think people will conjure up the james bond move and he that organization, specter. and unless you're really clear about how this is gonna be a transparent association and be accountable in all the ways that have been discussed today, then it's not eye question of whether people trust facebook or not it's a question of whether people trust this international -- this organization. run by private companies. and my view is when you're talking about a world currency that's gonna be potentially be used pie billions of people, i'm in the sure that's sufficient accountability that you could build into that system that will answer all the concerns. and i look forward to the continuing conversation. >> thank you. senator brown and i will both go with another round of quest

by saying the libra association has no plans to engage in banking at tiffany's. as you both know, we gave this specific authority to designate nonbanks as a-- so they do not threaten the financial system. in each of your opinions what time of systemic issues could libra and the association pose the investigation? there could be an incentive to ultimately liquidate holdings so that destabilizes the coin. secondly, if there's some kind of operational failure people can decide. if you scale up, it's entirely impossible in part. what if they decided they require the use of libra for their services or to offer consumers benefits? then you can imagine it becoming systemically important and as a result that's a huge challenge. people are seeing them regulate my a bank but one of the questions that i think is worthwhile is would facebook even be eligible for a banking license? a review would require an investigation of, say, facebook's earlier violations. >> because the united states is essentially with its own sovereign debt and-- that may be used will probably be the c

association and the libra association itself. i understand and i would urge you not use this for social engineering but to meet the intent we talked about the about helping the unbanked and people with cross-border payments. i hope that is the purpose and not social engineering. i appreciate your time. there are unanswered questions. i appreciate the innovation and your time. i look forward to working with you as you work to make sure you follow every law and regulation. i know it will be a challenge because you will be dealing with 200 countries regulations. thank you so much. >> the gentleman from california, mr. sherman, is recognized for five minutes. >> we need to get mark zuckerberg here. thing, or itiggest tries to be the biggest thing this committee will deal with this decade. while we have one of his employees here, this is zuckerberg's program. we are told by some that innovation is always good. the most innovative thing this century is when osama bin laden came up with the innovative idea of flying airplanes into tower

what did they think of the libra association? would you ever work with the libra association? brad: a lot of people signed up, the 28 members signed up, it was just an moi, no money changing hands, no hard commitment they wanted to have a seat at the table. they wanted to hear what was going on. i would be interested to see if the 28 who signed up continue to participate. it is too early to tell. i thought it was very noteworthy that there weren't any banks or financial institutions within those 28. it is an assault on that system, it is ambitious to say the least. emily: there been reports that there has been skepticism among the partners that have signed on. what are we hearing? kurt: they are not saying anything publicly. that is one of the concerns, that facebook is out here taking the beating for themselves. , theya project they claim are a cofounder with many other companies. if i am facebook, i'm saying, are you guys in or not? we could use support out there. with the banks, bloomberg has reported that facebook and others in the association are out talking to banks righ

how could this association, the libra association acquire and hold onto enough assets to be able to allow that one to one. >> it does seem like the gold standard. every time we, in the united states, have had a gold standard, it was still batched to money created by the government. we've never had a pure gold standard. this is what libra would advise. you'd have this bucket of currencies that would be worldwide. what happened if every one in greece invest in libra. that would destabilize dollars. >> wouldn't you have to have enough basket of currencies that would be available on a most as needed basis. do you think that is what markets meant? there would be a literal one to one. >> my understanding is it's a one to one based on a mixture of reserve currencies that they would ultimately specify. i would like to comment on this particular topic. i think it's critical which is the first wave of these private moneys like bitcoin and decentralized private money were focused on establishing a global digital currency with a specific monetary policy, ideology. those will continue to grow and like

what did they think of the libra association? would you ever work with the libra association? brad: a lot of people signed up, the 28 members signed up, it was just an moi, no money changing hands, no hard commitment they wanted to have a seat at the table. they wanted to hear what was going on. i would be interested to see if the 28 who signed up continue to participate. it is too early to tell. i thought it was very noteworthy that there weren't any banks or financial institutions as part of those 28. it is an assault on that system, it is ambitious to say the least. emily: there been reports that there has been skepticism among the partners that have signed on to this project. what are we hearing about that? kurt: they are not saying anything publicly. one of the biggest concerns, quite frankly, is that facebook is out here taking the beating by itself, for a project they claim that they are a cofounder with many other companies. if i am facebook, i'm saying, hey, are you guys in or not, you could use a little support out there. with the banks, bloomberg has reported that f

what do they think of the libra association? and would you ever work with the libra association? brad: i think what you saw happen, and kurt kind of alluded to this a lot of people signed , up, the 28 members signed up, it was just an l.o.i., no money changing hands, no hard commitment. they wanted to have a seat at the table. they wanted to hear what was going on. i would be interested to see if the 28 who have signed up continue to participate. yeah, i think it is too early to tell. but i do think it was very noteworthy that there weren't any banks or financial institutions as a part of that 28. because again i think it is kind of an assault on that system, which is ambitious, to say the least. emily: kurt there have been , reports that there has been skepticism among the partners who have already signed on. what are we hearing? especially since -- kurt: they are not saying anything publicly. i think that is one of the biggest concerns, quite frankly that facebook is out here taking for abeating by itself project they claim is very cofounder with many other companies. if i am f

what do they think of the libra association? and would you ever work with the libra association? brad: i think what you saw happening, a lot of people signed up, the 28 members signed up, it was just an loi, no money changing hands, no hard commitment. they wanted to have a seat at the table. they wanted to hear what was going on. i would be interested to see if the 28 who signed up continue to participate. yeah, i think it is too early to tell. but i do think it was very noteworthy that there weren't any banks or financial institutions as a part of that 28. it is an assault on that system, which is ambitious, to say the least. emily: there have been reports that there has been skepticism among the partners who have already signed on. what are we hearing? especially since -- kurt: they are not saying anything publicly. that is one of the biggest concerns, that facebook is out here taking the beating for --by itself for -- for a project they claim is very cofounder with many other companies. if i am facebook, i'm saying, are you guys in or not? we could use support out there. but

association. its 29 members include household names such as uber, visa and vodafone. but central banks have already expressed concern. last week the boss of america's federal reserve, jerome powell, said libra raises many serious concerns that need to be addressed. and late on monday, us treasury secretary steve mnuchin also expressed his fears, saying libra could be misused by money launderers and terrorist financiers. he added facebook still had more work to do. are you comfortable with facebook launching a currency in the right way? two i didn't say i was co mforta ble way? two i didn't say i was comfortable with them launching a currency. if they want to do it in an appropriate and safe way. but i am not comfortable today. they and others have a lot of work to do before they get us comfortable. dr garrick hileman, head of research at blockchain, joins me now. welcome to the programme. just explain how these digital currencies work. we can't explain it enough on this programme. it is confusing,

what did they think of the libra association? brad: a lot of people signed up, the 28 members signed up, it was just an moi, no money changing hands, no hard commitment they wanted to have a seat at the table. the 28 whoee if signed up continue to participate. i thought it was very noteworthy that there weren't any banks or financial institutions within those 28. that: there been reports there has been skepticism among the partners that have signed on. what are we hearing? kurt: they are not saying anything publicly. that is one of the concerns, that facebook is out here taking the beating for themselves. if i am facebook, i'm saying, are you guys in not? bloomberg has reported that facebook and others in the association are out talking to banks right now. i think it does add a level of legitimacy to this whole effort right now, -- this whole effort. right now, if you're facebook, you want someone to say something publicly. emily: on another topic, there have been reports that bank of america has taking a -- has taken out a paten

association. right now, there's no charter for that organization, there's no payments that have been made. at this point, it is just kind of a continue to talk about regulation. side, theybook's need to get their team together to get this moving forward because right now it is just a white paper. it is an idea, but it's not actually something tangible. >> you think regulators will let libra happen? >> facebook has had conversations with regulators before they announced it. some of those i know had expressed concerns. i don't think facebook really get enough to mitigate that. it's very important to both the u.s. government and governments around the world that financial regulation matters. know your customers and antiterrorist financing. these are important foundational pieces and the financial system. we need to make sure that the future constructs keep those in mind. the danger that is happening right now is that legitimate projects taking avenge of crypto to solve the real problems get caught in

>> sure, i think the proposal right now is for libra to set up the libra association which is going which is a partnership. i think there's over 20 partners right now they're trying to set up 100 partners. the partners would all basically come together and regulate this entity and basically run the currency. the partnership each are limited to 1% of the vote and they're trying to get to at least you know 100 members. so facebook would only play a very small part in the whole thing. i think that part of it people in general understand and i personally am comfortable with that. i think the question really comes down to more where the libra association and facebook over lap. and that is their kind of start up called libra that is going to be providing a wallet that serves the libra currency. >> members of this administration seem to be worried that facebook crypto currency might beused in some illegal ways. for nefarious purposes, drugs and trafficking. >> i think those are legitimate concerns when it comes to crypt orbing currencies. but to be fair many different currencies get used. if dru

they have announced we have this group of 28 partners that are going to be a part of the libra association that over sees this colonels. right now there currency. there is no charter for that organization or payments that have been made. this is continuing to talk about regulation. but on the facebook side, they need to get their team together to actually get this moving forward. right now it is just a white paper. it is an idea, but it is not exactly something that is tangible. emily: do you think the regulate yorlings will let libra happen in the u.s.? >> facebook has had conversations with regular lators before the white paper. they had concerns, and facebook didn't really do enough to mitigate that and make them feel comfortable. it is important to the u.s. gostisbehere and governments around the world. financial regulation matters. know about money laundering and anti-terrorist activities the we need to make sure that the future constructs keep those in mind. i think the only danger that is happening right now is that legitimate projects working on, taking advantage of crypto to solve

so would the libra association -- what would they do if u.s. regulators wanted to enforce sanctions on certain individuals, but other global regulators did not how would the association determine which set of rules to comply with? >> senator, that's a really good question and one that we are in active discussions with a number of regulators including treasury my understanding of this and the way that we are currently thinking about this is that actually the way to properly police and control the network is through, one, the off and on ramps and, two, all of the -- >> well, i'm going to take your word that you're not going to act before you have all these questions resolved if not, what libra could be is the wild west of crypto currency where countries looking to avoid u.s. sanctions, and we can't have that. >> i agree. >> thank you, mr. chairman welcome. one of the benefits of going last is you get to hear your colleagues' comments i want to make a couple of comments i hadn't planned to make otherwise senator kennedy rightfully pointed out face

>> there are 28 founding members of the libra association. the goal is to have 100 organizations that are going to be involved eventually. for now there's 28 that are part of the founding members such as anchorage. we are one of the founding members of libra. liz: tell us exactly what anchorage does. we kept hearing and seeing your name, your company, out of these dozens and dozens that are involved. we thought what's so great, why are you such a strong link here? >> anchorage is a very special company. what anchorage does is we are custodian for digital assets. so think of all of these investors that are desperate to invest in all of these new crypto assets, cryptocurrencies. they need a company that safekeeps the assets and allows them to actively use them on the exchange and obviously have returns on their investment. so that's what anchorage does. liz: what made you want to become an early backer of facebook's cryptocurrency project? obviously when you have a big brand behind sort of a brand new type of thing, of course, bitcoin has been

despite the libra association will be headquartered in switzerland, it will still register with finsend and will have oversight from u.s. regulators >> in his prepared remarks he said the swiss data protection commissioner will oversee privacy for the libra association. we got a statement from that regulator essentially saying that they've taken note of the statements made by david marcus on its role but until today we have not been contacted by the promoters of libra we expect facebook or promoters to provide us with concrete information when the time comes, only then will we be able to examine this you wonder why this wasn't happening before the congressional hearing yesterday especially given facebook's privacy track record >> before they came up with this white paper that almost everyone all over the world has been talking about nonstop since they announced plans to launch this cryptocurrency the launch was set to happen in 2020 with everything that's going on, it seems unlikely at this point. >> that's right. we're hearing not just from the lawmakers in the hearings but also from j

last month, the libra association, a consortium of 28 businesses including a facebook subsidiary announced it's developing a cryptocurrency called the libra the treasury department has expressed very serious concerns that libra could be misused by money launderers and terrorists financiers cryptocurrency such as bit coin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs, human trafficking. many players have attempted to use cryptocurrencies to fund their malign behavior. this is indeed a national security issue the united states has been at the forefront of regulating entities that provide cryptocurrency we will not allow digital asset service providers to operate in the shadow s and will not tolerate the use of the cryptocurrencies in support of illicit activities treasury has been very clear to facebook, bitcoin users, and other providers of digital financial services that they must implement the same anti-money laundering and countering finances of terrorism known as aml-cft safe guards of financial

as far as the libra association is concerned, that is the conversation we're having because -- >> so is it your view, the development internally of facebook, for you to be a competitor to alley pay and we pay? >> congressman, yes -- >> and to be a competitor to venmo and paypal >> congressman, so, yes, we have a number of wallets that are working with us on the network side but will compete on the wallet side. >> will that consumer data be kept separate or a part of the calibra data collected from consumers? will that be a part of facebook's overall knowledge of consumers or separate and distinct >> no, congressman we will make a strong commitment to keep that data separate -- >> separate and distinct >> yes. >> final question here so if you are seeking to be a competitor to ali pay and we chat, why are you doing this in switzerland? why are you using a basket of currencies why not the good old american dollar and to bring down the transaction costs, which is seemingly the ultimate goal here >> congressman, first i want to say that the choice of switzerland has nothing to do about ev

despite the fact libra association will be headquartered in switzerland, it will stell register with fenson and as a result we'll have oversight from u.s. regulators but completely agree with you, chairman, that the u.s. should be. >> so i appreciate that. you've already indicated that you see that in the united states that you'll need to deal with ofac, s.e.c. and some state regulato regulators the u.s. approaches data and data privacy in a sectoral way we have multiple regular regulators with different activity and social activity yours does it differently with gdpr, broad-based rule across sector if you look at fsoc in financial world, we've got treasury, federal reserve, fdc, fdic, cfpb, ncua, cftc, fhfa my question to you, have you analyzed and determined in our sectoral approach to regulation which of all these regulators could have a piece of creating the rules of the road, if the united states stays on this sectoral approach. >> chairman, this is not for me to say but all i can say today is that we're committed to working until we satisfy all the concerns and regulatory and m

last month, the libra association, consortium of 28 businesses including a facebook subsidiary is making libra. the u.s. treasury is concerned about it being misused by money launderists and terrorists and financers. cryptocurrency such as bitcoin have been exploited to export billions of dollars of elicit activity like cyber crime, extortion, ransomware, elicit drugs, human trafficking. many players have attempted to use cryptocurrencies to fund their mall lined behavior. this is indeed a national security issue. the united states has been at the forefront of regulating entities that provide cryptocurrency. we will not allow digital access service providers to operate in the shadows and will not tolerate the use of the cryptocurrencies in support of elicit activities. treasury has been very classified information to facebook, bitcoin users and other providers of digital financial services, that they must implement the same anti-money laundering, encountering financing of terrorism known as amlcft safeguards of traditional financial institutions. money transmitters of crypt to currency m

association. its 29 members include household names such as uber, visa and vodafone. but central banks have already expressed concern. last week, the boss of america's federal reservejerome powell said "libra raises many serious concerns" that need to be addressed.and late on monday, us treasury secretary steve mnuchin also expressed his fears, saying libra could be misused by money launderers and terrorist financiers. are you comfortable with facebook launching the currency, if they do it on the right way? i didn't say i was comfortable with them launching the currency. i am not comfortable today. let me be careful, as i said. they and others have a lot of work to do before they get us comfortable. it would seem nobody is co mforta ble comfortable. it would seem nobody is comfortable with this idea apart from those of facebook. glen goodman is the author of the crypto trader and hejoins me now. first, just explain how this currency would work? what is interesting about this, i think, is that most

i think the announcement of libra and the libra association, we view it as a massive inflection point. i think it has an impact across the board. it is going to bring this into the limelight. it is going to help individuals and businesses that are interested in this have dramatically more visibility. and we think it is going to help ensure that billions of people are able to access the benefits of cryptocurrency within the financial system. we think it is huge in terms of awareness, in terms of regulatory questions, and figuring out how crypto finance companies are going to work in this new round. romaine: what about the logistics of getting it done? do you think this would have been a better idea if it had come from someone other than facebook? jeremy: the first thing to realize is that blockchain's, public blockchain's that are capable of supporting hundreds of millions to billions of users with mainstream applications in finance, those are really just emerging. we went through the first generation of blockchain's with bitcoin, ethereum, and similar chains representing the second ge

association, which they have proposed to govern it, is really going to hang together and do anything meaningful. if it does, i think that will be a promising development terms of suggesting that this could be a manageable operation. but, look, it is legitimate that people should ask questions. facebook has invited skepticism because of their repeated malfeasance in many areas over the last few years, so i am not surprised. i am a little surprised that they announced it now, to be honest. emily: right. did they make a major miscalculation unveiling this now when they are not even going to launch it in a year, if they plan to still do that? david: it seems that way, and as i understand it, there was substantial disagreement in the company about whether now is the time to do it. mark zuckerberg and david marcus, i am sure, both wanted to do it, and they prevailed. mark zuckerberg is always going to prevail at facebook. but it may be that the naysayers were right. emily: meantime, kurt, alexandria ocasio-cortez, aoc, as she is known, called facebook a surveillance company, and while the

jeremy: i think the announcement of libra and the libra association -- we view it as a very massive inflection point and i think it has an impact across the board. first, just general awareness all around the world around cryptocurrency. it will bring this into the limelight it will help individuals and businesses that are interested in this have dramatically more visibility. ultimately, we think it will help ensure billions of people ultimately are able to access the benefits of cryptocurrency within the financial system. so, we think it is huge in terms of awareness. i think it is important in terms of ultimately regulatory questions and figuring out exactly how crypto finance companies are going to work in this new realm. romaine: what about the logistics of getting it done? when do you think we will actually see this? do you think this would have been a better idea logistically speaking if it had come other than facebook? jeremy: i think -- the first thing to realize is that blockchain, public blockchains that are capable of supporting hundreds of millions to billions of users with kind of

association, which they have proposed to govern it, is really going to hang together and do anything meaningful. if it does, i think that will be a promising development terms of suggesting that this could be a manageable operation. it is legitimate that people should ask questions. facebook has invited skepticism because of their repeated malfeasance in many areas over the last few years, so i am not surprised. i am a little surprised that they announced it now, to be honest. emily: right. did they make a major miscalculation and availing this now when they are not even going to launch it in a year, if they plan to still do that? way, and asems that i understand it, there was substantial disagreement in the company about whether now is the time to do it. mark zuckerberg and david marcus, i am sure, both wanted to do it, and they prevailed. mark zuckerberg is always going to prevail at facebook. but it may be that the naysayers were right. emily: meantime, kurt, alexandria ocasio-cortez, aoc, as she knows, called facebook a surveillance company, and while the hearing in which faceboo

those in the libra association and would have no special privilege means you would not have to trust facebook. trust is primordial, and we have made mistakes in the past, and we have been working and continue to work very hard to get better, and we have invested in a number of programs, notably on election integrity and a number of other issues. your question is whether i would trust all of my assets in libra, and the answer is yes, i would. >> my question was do you trust this enough to make your compensation paid for in your currency? david: senator, i would, because it is, in fact, 1:1. emily: david marcus, the cryptocurrency co-creator, before democratic and republican senators, who grilled him about their ability to guide data and finances, and sherrod brown's exchange about a lack of trust in facebook a huge part of that conversation. lawmakers compared the social media giant to a toddler playing with matches and blasted it for violating consumer privacy. senator brown called the cryptocurrency plan "delusional." marcus tried to reassure lawmakers that they would take things sl

in the libra association and would have no special privilege means you would not have to trust facebook. trust is primordial, and we have made mistakes in the past, and we have been working and continue to work very hard to get better, and we have invested in a number of programs, notably on election integrity and a number of other issues. your question is whether i would trust all of my assets in libra, and the answer is yes, i would. >> my question was do you trust this enough to make your compensation paid for in your currency? >> senator, i would, because it is, in fact, 1:1. they: david marcus, cryptocurrency cocreator before democratic and republican senators, who grilled him about their ability to guide data and finances, and sherrod brown's exchange about a lack of trust and facebook a huge part of that conversation. lawmakers compare the social media giant to a toddler playing with matches and blasted it for violating consumer privacy. senator brown called the cryptocurrency plan "illusion of." -- delusional. joining us from washington, our bloomberg reporter who was in the hea

because visa and paypal are part of this libra association. but what does it mean for their earnings >> isn't the action this year telling you that they are -- investors are not, for the moment, concerned this this libra thing is going to be massively disrupted. >> one element of it, though, is the criticism of libra is that, oh, it's only these private companies getting together and creating an association. that's how visa started! it was the banks that got together and it was a cooperative and it wasn't some government-chartered thing that said, now we're going to have -- this is the way we're going to process credit card payments >> i'm more concerned about the weightings of these things i know i pound away on this every week, but you look at amazon, you look at facebook, you look at alphabet collectively, it's 8, almost 9% of the s&p 500 by weighting now. and people keep piling into these sectors. so essentially, ten stocks are over 20% of the s&p. the other bottom part. and whatever happens -- >> what's the historical moves -- >> it's bee

last month a libra association, a consortium of 28 businesses including a facebook subsidiary announced it is developing a cryptocurrency called the libra. the treasury department has expressed very serious concerns that libra could be misused by money launderers and terrorists financiers. cryptocurrency such as bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, human trafficking. many players have attempted to use cryptocurrencies to fun their maligned behavior. this is indeed a national security issue. the united states has been at the forefront of regulating entities that provide cryptocurrency. we will not allow digital asset service providers to operate in the shadows and will not tolerate the use of the cryptocurrencies in support of illicit activities. treasury has been very clear to facebook, bitcoin users and other providers of digital financial services, that they must implement the same anti-money laundering and countering financing of terrorism known as amlcft safeguards as tradit

association chose to go to switzerland. it is regulatory clarity and easier sort of process in terms of doing something innovative, and they want that to happen here in america. so i'm cautiously optimistic but, you know, ten years into this i think a lot of us are still waiting for clarity. but i'm hopeful that today's efforts helped push things forward and that it created some of the much-needed political momentum to get it going. >> meltem demirors of coin share. thank you for joining us. >> thank you. >> i think she is very optimistic. >> more optimistic than me listen, i will tell you right now, asia is eating the u.s.'s lunch. they're so far ahead of us i'm afraid the u.s. may have already lost the race. we still have a chance, but it is very concerning to me this is where finance is going this is the new technology we talk about netflix and how that changed cable this is happening in finance today, and the u.s. is the center of finance. we're sitting in new york. this is what new york does, and we should take the lea

do using they are considering designating the libra association as systemic financial utilities or non-bank financial companies to be enhanced to enhanced regulatory oversight? chair powell: i think it is early to say. there hasn't been a principals meeting since the libra announcement. while there have been conversations, i think it is highly likely that fsoc will take this on any meaningful way. rep. waters: you very much. if you got a -- thank you very much. if you got a call from the president saying, i'm firing you, what would you do? chair powell: of course, i would not do that. rep. waters: i can't hear you. [laughter] chair powell: my answer would be no. rep. waters: you would not pack up and leave? chair powell: no. rep. waters: because you believed the president is not have the authority? pres. trump: i believe i've said --chair powell: i believe i've said what i mean to say on this issue, that i am afforded a four-year term, and i intend to serve it. rep. waters:. i hope that everyone heard that -- rep. waters: i hope that everyone heard that. i will now defer to the ranking memb

and then the libra association. towe are evaluating how approach this, are those the three buckets we should be looking at? two, what gives you the biggest concern? maybe i am running out of time. we will submit this in written questions. any feedback you have on that would be appreciated. i yelled back. rep. waters: mr. lawson, the gentleman from florida is recognized for five minutes. lawson: thank you, madam chair. elaborate how to the top 1% of u.s. families own 40% of the wealth in this country? how do we get to that particular point? -- in the any kind of future? the top 1% on 40% of the wealth in america. we say we are a rich country compared to other countries. how do we get to the point where 1% own 40% of the wealth of this country? i have seen: what and what i've mentioned in my testimony that is troubling is a couple things. and lowerian incomes incomes have stagnated compared to those at the high end. there was a time not to long ago , there is always a disparity between the wealthiest in the least, but

association. but i think that the feeling from lawmakers is that this is all a bunch of promises and facebook has broken promises before >> all right, thank you. and we'll see you again, no doubt. >>> here's what else is coming up on "the exchange. >> coming up, what today's results from the banks could be telling us about the state of the consumer >>> plus, one economist says the president has a new tactic in his war on the fed dreadful nominees. >>> and ikea is saying good-bye to its only u.s. plant we'll tell you why exan."s is "the chge on cnbc. rmalcy is restored. we'd been working for days on a site in a storm devastated area. a family pulled up. it was a mom and her kids. everything they had had been washed away. the only thing that brought any kind of solace was the ability to hand her a device so she could call her family and let them know that she was okay. (vo) there for you when it matters most. join us and get up to $650 when you switch. that's verizon. here, hello! starts with -hi!mp

the libra association. we are just in the process of thinking this through, but i think one of the notable features is that the supervision and regulation would fall in front of many different agencies, state, national, and international, and we need to get our arms around that for starters. sen. crapo: thank you. you've actually lead into my second question on that. i was going to talk about how we fit in all of our banking sec, and frankly going beyond even financial regulators to capture the entire scope of not just this, but many other aspects of the data collection going on in the global experience we are having come of the human experience we are having on the internet -- we are having, the human experience we are having on the internet. do we need to look at the possibility of creating a new regulator for data protection? chair powell: i think that is exactly the question we need to be focused on, one of many we need to be. focused on. it isn't clear -- need to be focused on. it isn't clear from our

at this point it is non-binding in this libra association. so they're all planning to roll up their sleefves and try to wor together to figure out if there is a design and an application of crypto in payments. it is early at this point but they're trying to collaborate on the initiative. >> hey, lisa it is b.k. i'm curious. with did facebook do this? they didn't have to. they had to anticipate there would be a lot of regulatory push back. what else is going on here are they trying to use the technology in a different way or what do you think? >> well, i do think they look at their user base, and the striking thing about facebook's user base across all of the platforms is something like 70% of it is in developing markets, like not in the u.s. and in europe, in north america or europe and when they look at enabling or empowering commerce for those users, literally, you know, a billion plus, 1.6, 1.7 users, a big enabler of commerce for the users is actually enabling financial services, enabling payments a cryptocurrency which can fuvgs as an al

how could this association, the libra association, you know, acquire and hold onto enough assets to be able to allow that one to one? >> it does seem like the gold standard or like the money markets. one of the things that differentiates this is every time we in the united states have had a gold standard, it was still back to money created by the government. e golde never had a pur standard. this is what libra would advise. what happens if everyone in greece all invested in the libra? that would sort of destabilize the u.s. dollar. if we are going to have a basket of currencies and no central issuer, there are potential problems. i am not saying they cannot be solved. >> wouldn't you also have to have enough basket of currencies that would be available on almost an as-needed basis, and again, if you're talking not millions or billions, but hundreds of billions or trillions potentially, do you think that really is what the markets meant? that there would be a literal one-to-one? mr. allaire: yes, thank you, senator. my understanding is yes, it is a 121 based on a mixture of -onerve curr

to be a bank, and then the libra association its. as we're evaluating how to approach this, what gives you the biggest concern, sort of said let's pause it broadly and maybe i'm running out of time, so we'll submit this in written questions, but any feedback you have on that would be greatly appreciated by this committee. thank you, i yield back. >> thank you >> mr. law sanson -- mr. lawson, the gentleman from florida. >> could you elaborate and 1% of u.s. families own 40% of the wealth in this country, how do we get to that particular point? do you see any kind of banners coming in the future the top 1% own 40% of the wealth in america we are a very rich country compared to other countries, but how did we g et to the point where 1% own 40% of the wealth in this country? >> what i've seen and what i've mentioned in my testimony that's troubling is that a couple of thu things first, median incomes and lower incomes have stagnated compared to those at the high end there was a time not so long ago when, you know, there's always a dispar