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Updated: 18th November 2019 01:46 Business

Zuckerberg to tell U.S. House that Facebook digital currency won't evade laws

Facebook CEO Mark Zuckerberg will try to reassure the U.S. Congress today that his company won't try to evade financial regulators as it prepares its planned digital currency Libra.

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Libra payment system being billed as solution for people with no bank account

Facebook's Mark Zuckerberg appears before a committee of the U.S. Congress Wednesday, aiming to reassure lawmakers that the company’s planned Libra cryptocurrency won’t launch unless all U.S. regulators approve. (Andrew Harnik/The Associated Press)

Facebook chief executive Mark Zuckerberg aims to reassure the U.S. Congress today that his company won't try to evade financial regulators as it prepares its planned digital currency Libra.

In prepared remarks released Tuesday ahead of a 10 a.m. ET hearing before the House Financial Services Committee, Zuckerberg says that Facebook "will not be a part of launching the Libra payments system anywhere in the world unless all U.S. regulators approve it."

That's a stronger statement than Facebook official David Marcus made in July, when he said the company will not offer Libra until it has "fully addressed regulatory concerns and received appropriate approvals." Marcus leads the Libra project at Facebook.

Zuckerberg is trying to defend Libra and alleviate concerns that the currency could sidestep regulators. Analysts say Libra could avoid regulation and launch in countries where it's not receiving pushback, but this does not appear to be Facebook's intention.

Facebook is officially moving forward with its digital currency project Libra, despite several high-profile defections from the project and intense criticism from U.S. regulators and politicians. (Richard Drew/The Associated Press)

Instead, Zuckerberg is pushing an optimistic vision of Libra and what it could mean for people around the world who don't have access to bank accounts.

"The financial industry is stagnant and there is no digital financial architecture to support the innovation we need," his statement reads. "I believe this problem can be solved, and Libra can help."

Libra has seen several high-profile defections among other companies that originally supported it, including Visa and MasterCard.

While some critics see those departures as evidence of Libra's likely failure, U.S. regulators appear to view it as enough of threat that they are considering the possibility of the Federal Reserve launching its own competitor currency.

"At the Federal Reserve, we will continue to analyze the potential benefits and costs of central bank digital currencies, and look forward to learning from other central banks," U.S. Fed governor Lael Brainard said in a speech last week.

Zuckerberg's remarks also play the China card, urging regulators to act quickly.

"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 says in the statement. Marcus made a similar argument over the summer.

In 2018, when Zuckerberg spent two days testifying before Congress on privacy, competition and a host of other issues, his notes cited competition from China as a reason against breaking up Facebook.

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