Federal Chairman Powell Trusts Facebook’s Libra Raises Serious Concerns Needing Addressed
Ever since Facebook announced its plans for Libra, which will be run by the Swiss-based Libra Association in 2020, many mixed opinions have been expressed. Recently Fed Chair, Jerome Powell was questioned by Chairwoman, Mrs. Waters, in regard to Libra and any potential risks tied to it.
Powell initially started his viewpoint on expounding upon the importance he saw in supporting innovation within the financial services sector. While Libra’s project sponsors trust that this project would potentially bring public benefits (i.e. in terms of payments), he thinks more time is needed to fully grasp Libra due to some serious concerns. In particular, he said:
“Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability.”
He further noted that these concerns need to be addressed both “thoroughly and publicly” and that the necessary time should be taken, rather than rushing or
“sprinting to implementation.”
Powell also revealed that a working team has since been gathered to investigate Libra, which includes a collection of government individuals, including “the United States, regulatory agencies, treasuries […] central banks and governments around the world.
News outlet, CNBC, was the one to have released the video regarding Powell’s viewpoint and has since disclosed that Representative Bran Sherman, D-Calif., was one of some who expressed distaste for Libra. Sherman was quoted saying that acceptance of Libra would be equivalent to:
“[Transferring] power from the United States government to sanctions and tax evaders, terrorists, and drug dealers while reducing the importance of the U.S dollar as the reserve and trade currency… [Mark Zuckerberg] is the one that has made billions of dollars out of us […] and now wants to undermine the system.”
Head of Facebook’s Calibra Digital Wallet, David Marcus is set to present himself in front of the Senate Banking Committee on Tuesday, July 16, followed by the House Financial Services Committee on Wednesday, July 17. Marcus has since been quoted saying,
“We want and need governments, central banks, regulators, non-profits, and other stakeholders at the table to value all of the feedback we’ve received.”