Facebook’s Libra Cryptocurrency Attracts Quick Sentiments from G7 Regulators
Facebook’s plan to unveil its own digital asset has caused unrest amongst financial regulators across the developed countries.
Central authorities that oversee monetary policy in various jurisdictions have echoed their disagreement to the development of Libra crypto. The legislators and heads of Central Banks seem to agree on this with insignificant exceptions!
At the moment, scrutiny into this new technology by Facebook has already began. This follows the concern by regulators on Facebook’s disruption potential within the fiat currency system and its ability to protect consumers given the firm’s history with information.
Reactions from different figures of influence in the G7 countries have been summarized in the next section of this article;
Bruno Le Maire, Minister of Finance in France, completely dismissed the potential of Libra becoming an independent currency. The minister went on to add that this is not acceptable making further requests to G7 monetary regulators for a detailed review in which they are expected to submit reports in July.
One European Parliamentarian, Markus Ferber, was of the view that this could eventually empower Facebook and elevate it to a “shadow bank”. He noted that authorities ought to be alert on Libra’s development.
The United States Senate has also weighed in on the matter and subsequently halted Facebook’s activity on project Libra. Maxine Waters, head of the House Financial Services Committee, called for this action after Rep. Patrick McHenry requested that the matter should first be heard on the House before further development of Libra.
According to Maxine Waters, this should be a cause of alarm for Capitol Hill legislators especially in matters cybersecurity. This is particularly geared towards crypto affiliated activities which carry along great risks as they remain ‘foreign’ assets to a majority of the world’s population.
She added that Facebook’s past reputation with information indeed calls for a halt in Libra development until the matter is heard in Capitol Hill and an appropriate action is taken by the legislators.
Sherrod Brown, the Ohio Senate representative and the lead leftist in the house Banking committee also weighed in. His sentiments were similar to those shared by fellow colleagues in the senate.
However, he further noted that Facebook’s status as too powerful and too big as an IT giant poses a greater risk if the firm is allowed to run an independent crypto coin. The argument was that there is no room for Facebook to operate such a currency without backing in accounts like Swiss bank and no regulation.
The FED through its chairman, Jerome Powell, acknowledged that the regulator has engaged Facebook in regards to Libra. In addition, the IT giant has done ground work around the globe to push for its innovation. He noted that this development just like many others has both pros and cons hence the need to proceed with caution.
Mark Carney, England’s bank governor, is among the few who have an open-mind towards Facebook’s Libra. He however said that wide acceptance of this digital coin would definitely invite a lot of scrutiny and eventually not an easy task to push for its launch without opposition from monetary regulators.
Australia’s regulatory authority through Philip Lowe, the country’s Central bank chief agreed that this matter has a lot of underlying questions. He argued that it might take time to prove the commercial efficiency of project Libra due to regulatory hurdles hence the need to be vigilant before making any final decisions.
The liberal Swiss Financial services sector has also commented on Facebook’s development although not in a dismissive tone compared to other players. The country’s regulator (Swiss Financial Market Supervisory Authority) is in talks with Facebook to review on Libra’s legality and any processes required for the digital asset to become valid within its jurisdiction.
Facebook has been the talk in crypto for the past week since this announcement. The firm’s objective is to bring digital money to most of the world’s unbanked population at lower costs as it prepares to launch Libra in 2020!