Ever since Facebook released the white paper for its cryptocurrency, Libra, it has been under fire from governmental authorities. On Tuesday, there was a Senate hearing to address the concerns surrounding Libra. During the hearing, David Marcus, the lead developer of Libra and Facebook’s head of blockchain solutions, said that the United States will be exposed to security risks if there are no innovations in the current financial system.
David Marcus Talks About National Security Risks
During the hearing, Sen. Tom Cotton asked Marcus how Libra would affect the United State’s ability to impose sanctions. He noted that Iran started developing its own cryptocurrency after the United States imposed sanctions on the country. In response to cotton, Marcus said; “I am happy that you brought this issue up because I feel like if we do not take the lead in the space, others will. Also, just like we will eventually end up having two different infrastructures and the Internet, there are going to be two different financial systems and networks. When this happens, one will be unreachable with these sanctions that are meant to protect our national security.”
What Marcus is saying here is that the United States government needs to work hard to get ahead of fragmentation in the financial services industry. This is the only way that they will avoid fragmentation of the industry and protect the country from national security risks. He said that in the next 10 to 15 years, there would be complete fragmentation of the financial system with half the world using blockchain technology and the other half depending on traditional systems.
Blockchain technology is free from governmental control making it out of reach to sanctions. Unless the government looks for innovative ways to stay on top of the situation, there is going to be complete fragmentation of the financial system.