The European Central Bank (ECB) is the latest regulator to express concern over Facebook's planned digital currency, Libra. The ECB main point of concern is that Libra could offer an alternative financial system to existing ones and as a result, sabotage their monetary policy.
This comes not so long after the US House of Representatives Committee on Financial Services requested Facebook and its partners to halt any development of Libra until investigations had been conducted by lawmakers on the digital currencies potential risks and benefits.
"It’s out of the question to allow them to develop in a regulatory void for their financial service activities, because it’s just too dangerous. We have to move more quickly than we’ve been able to do up until now," Benoit Coeure, a member of the European Central Bank’s Executive Board, is reported to have said.
Despite Facebook emphasizing that Libra would be backed by a basket of real world currencies such as the US Dollar, the ECB believes that it is "just too dangerous" for Facebook, and by extension other Big Tech companies, to issue cryptocurrencies and digital currencies without any financial regulations in place. The ECB and US House of Representatives are not the only ones voicing concerns.
The three main financial regulators in the United Kingdom have also indicated that they are working together on how best to respond to news of Libra's imminent launch in 2020. Specifically, the Bank of England has said that it approaches it “with an open mind but not an open door.”
On the other, despite previously being vocal on cryptocurrencies, African regulators have thus far been quite on Loibra as no official statements have been issued. This is curious especially considering that Facebook has made it clear that Libra is about financial inclusion and it is targeted at developing countries and the 1,7 billion people who are unbanked, many of whom are in Africa.Share this article via: