Legislators and regulators, most of whom have long been fierce critics of Bitcoin are slowly warming up to the prospect of accepting Bitcoin but could be subscribing to the ‘Bitcoin, not blockchain’ narrative. California Republican and House Minority leader Kevin McCarthy is one such legislator who recently expressed his liking towards Bitcoin but was keen to point out that he is not a fan of Facebook’s proposed cryptocurrency Libra.
“I like bitcoin,” he said during an interview with CNBC this week because it offers a sense of security and decentralization that comes with a public blockchain, something Facebook is not offering.
Facebook could just be the trigger for mass adoption of cryptocurrencies but not because it may succeed but because it may force regulators who have been lagging to create a legal environment that supports the development of solutions on the distributed ledger technology.
According to McCarthy and accurately so, nobody controls Bitcoin. It may not be where it should ideally be as a payments network but it is a better proposition than Libra.
“When I’m on Facebook, I’m not the customer, I’m the product,” he said. “Facebook is free because they sell your data to make money. Now they want to get into the business, and they’re not bitcoin, in this Libra. They’re not decentralized.”
Libra promises more stability as the token will be pegged to a basket of fiat currencies. That may be well a good thing but not good enough for the future economy that seeks an economic system that does not need to trust anyone to thrive. “I want to see decentralization because Libra concerns me that they’re going to control the market,” McCarthy added.
Facebook executive David Marcus, who is the lead in the Libra project has been grilled in Congress about the plans proposed by Facebook. Over the last two days, he testified before the Senate Banking Committee on Tuesday, July 16th and before the House Financial Services Committee on Wednesday.
In both hearings, Marcus did not come out as convincing about Facebook’s intentions in developing the new financial system. Most of the legislators were fixated on the possibility of Facebook mismanaging users’ financial data as it has previously done with their personal data shared on its popular social media platforms.
It will be hard for the Libra project to see the light of day if Facebook does not earn the trust of its users within the next few months to its launch which is scheduled sometime in the first half of 2020.
