Fed Governor Brainard: Facebook’s Libra Will Face Several Regulatory Challenges Before Existing
The governor of the U. S. Federal Reserve, Lael Brainard, spoke about Facebook and the launch of the Libra stablecoin. According to Brainard, before Facebook is able to make a single transaction, the company has to overcome the core of regulatory and legal issues.
She affirmed that this could complicate Facebook’s plans and that the Fed was not really rushing to devise its own central bank-issued digital currency (CBDC) because it would raise several legal and operational doubts that had to be solved before something that like that could turn into a reality.
Brainard said that nobody should be surprised that Facebook is attracting such a high level of scrutiny. The Libra would be a global project as it was never seen before and Facebook is not a company that is very trusted, so governments and regulators from all over the world jumped to question the company before the launch.
Several policymakers have shown skepticism about Facebook’s plans to launch Libra next year. As several companies from the Libra Association have dropped out, it seems that the chances that we’ll see the launch very soon are every day slimmer than before.
She also talked about how non-sovereign cryptos and stablecoins such as the Libra could pose risks to financial stability if they are not managed very well.
While the executive leading the initiative, David Marcus, believes that the project will get off the ground soon and that the regulators will allow it as soon as there are more backers, Brainard believes that the Libra is simply failing to address several aspects of the international regulations such as how to stop people from using it to engage in legal transactions.