Facebook CEO Mark Zuckerberg will testify before the House Financial Services Committee on Wednesday, telling lawmakers that the Facebook-backed libra cryptocurrency "will extend America's financial leadership as well as our democratic values and oversight around the world."
"While we debate these issues, the rest of the world isn't waiting. China is moving quickly to launch similar ideas in the coming months," Zuckerberg said in his prepared remarks. "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."
Zuckerberg's testimony comes after a rough few weeks for the Libra Association, which is the group that governs the libra cryptocurrency. The Libra Association saw its membership dwindle down to 21 after the departures of Visa, Mastercard, PayPal, eBay, Stripe, Booking and Mercado Pago.
When Facebook announced libra, the social media company said that it planned to launch the digital currency in 2020. Since then, the company has said that it will not launch Libra until it receives regulatory approval. Zuckerberg reiterated that stance in his prepared remarks.
"Even though the Libra Association is independent and we don't control it, I want to be clear: Facebook will not be part of launching the Libra payments system anywhere in the world until US regulators approve," Zuckerberg said.
In his remarks, Zuckerberg also stressed that the future of the libra cryptocurrency is now in the hands of the Libra Association, not Facebook.
"By design, we don't expect to be leading those efforts going forward," Zuckerberg said. "The Libra Association has been created, has a governance structure in place, and will be driving the project from now on."
Zuckerberg also refuted that libra is an attempt to replace sovereign currency.
"Finally, there's the question of whether libra is intended to replace sovereign currency, and whether it's appropriate for private companies to be involved in this kind of innovation," he said. "I want to be clear: this is not an attempt to create a sovereign currency. Like existing online payment systems, it's a way for people to transfer money."
However, Zuckerberg did not clearly explain why Facebook felt the need to propose a new cryptocurrency as part of its system when competitors like PayPal's Venmo, Apple Pay or Square Cash function perfectly well with existing government-backed currencies.