Despite Facebook’s recent assurance to United States lawmakers that it will not launch Libra without having first addressed regulatory concerns, the company appears unwilling to discuss whether it will consider launching Libra in an alternative jurisdiction in the hypothetical event that other nations are willing to allow the cryptocurrency before the U.S. makes a regulatory determination on the matter.
Facebook Won’t Rule Out Libra Launch in Alternative Jurisdictions
During last week’s Senate Banking Committee hearing on the proposed virtual currency, David Marcus, the executive of Facebook’s cryptocurrency project, sought to assure U.S. regulators that the company will not launch Libra without having first addressed regulatory concerns. In his opening statement, Marcus stated: “I want to be clear, Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals.”
Dave Lee of the British Broadcasting Corporation (BBC) reached out to Facebook asking “If the US doesn’t give approval, but Facebook gets approval elsewhere in the world, will Libra’s launch go ahead in those places?”
A spokesperson responded with:
David [Marcus] committed that Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals. This is Facebook’s commitment. We will be offering Libra through Calibra. Calibra will only launch in jurisdictions in which we have approval to launch.
Lee pressed the issue further, asking “If the US is yet to approve Libra/Calibra, but country X does, will Facebook launch Calibra in country X?.” According to the journalist, the spokesperson declined to comment on “a hypothetical scenario,” with a further attempt at questioning being met with “Nothing more to share on this.” However, the spokesperson indicated that Marcus’ remarks at the Senate Banking Hearing specifically concerned the Calibra wallet, rather than Libra the digital currency broadly.
Facebook’s Libra Association is Domiciled in Switzerland
With the Libra Associated headquartered in Switzerland, it is entirely possible that the digital currency could receive regulatory approval in a jurisdiction other than the United States before U.S. regulators have made a decision.
Regarding the potential of a Libra launching off-shore in the absence of U.S. regulatory approval, Senator Mark Warner of the Senate Banking Committee stated: “Mr. Marcus was very clear that Facebook ‘would not launch until all concerns are addressed’ and I believe he is a man of his word.”
The senator emphasized the potential systemic consequences of Facebook launching a monetary instrument backed by U.S. assets, stating:
“With Libra backed by the US dollar and dollar-denominated securities, its launch will have very real consequences – and poses very legitimate stability and soundness concerns – for the US, even if Facebook chose not to launch it in the US. I appreciate Facebook engaging policymakers on this front and fully expect them to adhere to Mr. Marcus’s commitment not to launch Libra – full stop – unless and until the concerns of regulators are addressed.”