Facebook’s Libra Will Have To Satiate The Taste Of The European Regulators Before EU Launch
A board member of the European Central Bank and a French economist, Benoit Coeure confirmed that Facebook’s cryptocurrency Libra will not be launched till global regulators is happy with it.
In an interview with Reuters, he said:
“You’ve got to be safe, robust and resilient from day one. It’s not a learning process: either it works or it doesn’t. Down the road, we might find that there are gaps or inconsistencies that would require a prolonged discussion by regulators on how to do it differently. Authorities are not going to let any such projects happen before we have answers to our questions and before we have the right regulatory framework.”
The company has been running into numerous regulatory obstacles as it moves forward with pre-compliance conversations with monetary organizations around the world. Facebook has to organize with financial overseers, enforcement agencies and central banks all over the globe.
Facebook has reached out to Britain’s Financial Conduct Authority, the Bank of England, and Switzerland’s financial regulator, FINMA. As for the Russian Ministry of Finance, it said Libra is going to be managed just like any other digital currency, with the same ordinances, the same follows for Switzerland and numerous other nations.
Coeure has been vocal about his call for action for legislation around Libra. He argued earlier this month that allowing for the development of new financial services and asset classes in a regulatory void is irresponsible. The development of digital assets has exposed gaps in current financial regulations and underlines banks’ slow rate of adoption of new technologies.
Libra has also led to mixed reactions in the US where around 30 influential groups and lobbyists including some Congress members calling for a halt of the initiative until all ‘profound questions’ it has raised can be answered. Even President Trump is of the opinion that if Facebook and others want to become a bank, they have to go through the regulatory processes just like other banks in the country.