Global financial regulators and central banks are calling in officials from Facebook’s Libra cryptocurrency to explain the potential financial risks the stablecoin poses in the global fintech industry. In a report on FT, Libra executives are meeting the Committee on Payments and Market Infrastructure (CPMI) – a committee made up by central banks from the G10 countries – today, September 16, in Switzerland.
A Global Grilling For Libra Executives
Earlier in the year, the US Senate grilled David Marcus, CEO of Libra Association, in a bid to understand the goals and risks of the 27 member association in the financial system. Today, officials from the commission, which is a part of the Bank of International Settlements (BIS) in Switzerland, will meet with Libra representatives to discuss possible risks the digital asset poses to the global financial system.
CPMI is a committee including 28 member central banks across the globe chaired by Benoît Cœuré, a member of the executive board of the European Central Bank (ECB). Members of the commission include Bank of Japan, Central Bank of the Russian Federation, South African Reserve Bank, Board of Governors of the Federal Reserve System and The People's Bank of China among other top central banks.
Europe Against Development Of Libra Stablecoin
In the past few weeks, central banks in the European Union have come out strongly against the licensing of Libra in the region. On Sept 12 France’s financial minister, Bruno le Maire, said the acceptance of cryptocurrency as a form of payment increases the potential for abuse of market dominance and systemic financial risks.
Furthermore, Germany released a statement joining France in preventing the development of Libra stablecoin in the countries. The statement claims no private entity, like Facebook’s Libra, will claim the monetary power that central banks enjoy currently. The regulations are set to reduce the cases of money laundering and
A European Digital Currency On The Way
Despite the regulation-laden approach the EU is taking on Libra, Cœuré hinted at the possibility of the ECB launching its own digital currency. The chair spoke to regulators stating the need to “step up our thinking on a central bank digital currency.”
Despite the regulation challenges, the company reinstates its belief in launching the cryptocurrency by the end of 2020.