“We understand that big ideas take time, that policy makers and others are raising questions, and that we can’t do this alone,” Marcus wrote in the July 8 letter. “We want, and need, governments, central banks, regulators, non-profits, and other stakeholders at the table and value all of the feedback we have received.”
A day later, Federal Reserve Chairman Jerome Powell raised major questions about Libra that he said must be addressed before the plan moves forward. “Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” Powell told lawmakers at a House Financial Services Committee hearing in Washington.
Calibra will build and maintain the company’s digital wallets and work on the Libra cryptocurrency. Marcus has said Calibra will store this financial data on separate servers, and won’t share it with Facebook. But Alisie is concerned the information flow will go in the other direction.
"Will Facebook share personal data with Calibra? Based on what I’ve read, I think that will be the case," he said.
Being a Facebook user isn’t the only way to access Libra, Disparte said. "If you don’t trust Facebook, opt out and don’t use the Calibra wallet," he said. Still, he added that Facebook’s global nature and platform for raising awareness of cryptocurrency will greatly increase its acceptance. "This project will help drive mass adoption of cryptocurrency more so than anything to date," he said.
That’s what Alisie fears. He said Facebook is asking regulators to pass judgment on it not in its current state, but in five years when it promises to be decentralized. That’s intended "to mislead the regulators who have learned in the last few years that blockchain is not something that can easily be regulated," he said. "It should be treated as an entity trying to create a centralized currency."
Ethereum was built to allow anyone to design applications that work on top of the network with no one being able to affect the protocol. The debate now with Libra is similar to net neutrality, Obama-era rules that banned internet service providers like Verizon Communications Inc. and Comcast Corp. from blocking or slowing traffic on their networks. The Trump administration has reversed those rules.
"People should be aware this is a danger very similar to net neutrality," Alisie said. "Is it smart to have this infrastructure layer owned by a company?" The innovation blockchain brought about is that it gives power to individual users because they no longer need to rely on third-parties like Facebook or Verizon, he said.
"This is not an upgrade, this is a downgrade for what blockchain means," Alisie said.
--With assistance from Austin Weinstein, Jesse Hamilton and Kurt Wagner.