Recap Before Zuckerberg Faces Senate

Today, Oct. 23, Facebook CEO Mark Zuckerberg will testify before the United States House of Representatives Financial Services Committee regarding Libra - the company's stablecoin project that has been facing major regulatory backlash since the day it was announced.

The Calibra head emphasized that Libra users will not have to put their trust in Facebook because the social media giant is not the only member of the Libra Network.

Two U.S. congressional hearings on Libra took place, as Marcus testified on behalf of Libra before concerned senators.

During the hearing before the Senate Banking Committee, Sen. Sherrod Brown of Ohio said Facebook is showing "Breathtaking arrogance" in its attempt to launch a cryptocurrency, given its involvement in a number of high-profile privacy scandals; and Rep. Brad Sherman, a Democrat from California, called Libra "a godsend to drug dealers and tax evaders," during a hearing before the House.

In the key takeaway from those meetings, Marcus said the governing body behind Libra has "No plans to engage in banking activities," and reassured the lawmakers that Facebook would not launch Libra before it has addressed all regulatory concerns.

In late September, Zuckerberg appeared less certain about Libra's future.

In the accompanying press release, the Libra Association stressed that "Over 1,500 entities have indicated interest in joining the Libra project effort, and approximately 180 entities have met the preliminary membership criteria," suggesting that there are no irreplaceable members.

Now, Zuckerberg is going to face regulators and their questions regarding Libra - which, judging by previous U.S. congressional hearings on the matter, are likely to be blunt, if not provocative.

"While Senators will push him to accept responsibility for Libra, which he likely will, I would expect him to also attempt to distance Libra from Facebook. There are many avenues with which he can stress this, including the fact that more than 20 organizations are in the Libra association and that over time the association plans to decentralize the project and corresponding stablecoin even further."

"FB has a huge power problem, and the last thing it wants is regulators thinking that Libra will also inherit this kind of power," Stylianou added, "Facebook wants to present Libra as systemically innocuous. Being a monopolist in other markets does not help with that case."