Facebook blockchain leader David Marcus told US lawmakers that the social media giant plagued by privacy scandals will not have access to personal financial information with his new cryptocurrency.
In a letter dated Monday to the Senate Banking Committee responding to pointed questions lawmakers sent in May, Marcus took a diplomatic note, recognizing the panel's concerns about data security and telling them:
"I will give you my personal assurance that we are committed to taking the time to do this right. "
A similar letter was sent to the House Financial Services Committee, Hill reported earlier on Tuesday.
Marcus said that personal data would not be linked to any transactions performed on Libra blockchain.
"Like existing and widespread cryptocurrencies such as ethereum and bitcoin, transactions that take place directly on Libra Blockchain are" pseudonymous ", meaning that the user's identity is not unclearly visible," he wrote, grading a promise Facebook has done since it revealed the Libra project last month.
Blockchain addresses in a transaction, a timestamp and the transaction amount will be public, but someone knows your customer (KYC) or anti-money laundering (AML) information must be stored by the wallet providers.
As a warning, Marcus noted that Libra would be an open source platform, a third-party developer could build his own digital wallet.
These third parties would be responsible for how their Libra wallets are built, explained Marcus, and say "it will be these vendors to decide what kind of information they may require from their customers and to comply with regulations and standards in the countries they operate i.
"Regulators of Calibra and other digital wallet services may require that they collect information about the identity and activities of users and make such information available to law enforcement and regulatory agencies, for example for AML, CFT [counter-financing of terrorism] and sanctions. "
In response to questions about what kind of consumer financial information Facebook already has, Marcus wrote that a subsidiary of the social media giant (unrelated to Libra) stores" non-public personal financial information ", such as proof of payment, in accordance with applicable law of transactions, but that this information is not used for advertising or for personalization.
Moreover, because the Facebook Payments, Inc. subsidiary processes these transactions, Facebook does not have access to any payment information, even if it does collects other information related to a transaction, such as the seller, the transaction amount, the date and time, and the good bought.
Church and State
The Libra Association, Facebook's governing body for its block chain ne twork, will have even less information than Facebook Payments makes Marcus the senators.
Because validation nodes or wallets will process and save t transactions, neither Facebook nor Libra will store personal data, he claimed.
Facebook created a subsidiary to develop an open source wallet for Libra, called Calibra. Marcus explained that "Calibra will be Facebook's representative in the association. As a separate, regulated Facebook Facebook, Calibra will protect the consumer's financial data and will not use or share this data for ad targeting."
As a trademark fee, Calibra will maintain some consumer economics data.
"Except for limited cases, Calibra will not share account information or financial data with Facebook or any third party without the customer's consent," says Marcus.
Exceptions include data shared with law enforcement agencies or regulators in accordance with the AML or CFT law purpose, as well as in accordance with the Sanctions Act.
"For example, Calibra's customer account information and financial data will not be used to improve the ad targeting on Facebook or across its family of social media and messaging products," added Marcus. [1
The US Senate Bank Committee is scheduled to hold a hearing on the project on July 16, with the House Financial Services Committee another next day. Marcus will testify in both.
Marcus said in his letter on Tuesday that the company had reached financial services, regulators, central banks, policemen, the Treasury and the Treasury officials and other groups to discuss the project.
The Libra Association will work with decision makers and regulators to ensure that this new ecosystem is a value-creating economy, consumer protection, and appropriate state and central bank governance. The association is fully committed to promoting the global dialogue on how to block and encrypt encryption. "He wrote.
Read the whole letter to the Senate Bank Committee here:
2019.07.08 FB Letter to Sen … off at Scribd
David Marcus image via CoinDesk archives