Libra Won’t Launch Until Regulatory Issues Addressed, Says Executive
Facebook won’t offer its digital currency Libra until the company receives the “appropriate approvals” and all regulatory concerns are “fully addressed,” Calibra Head David Marcus is expected to tell the Senate Banking Committee Tuesday (see 1907050025). He anticipates the most…
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“careful pre-launch oversight by regulators and central banks in FinTech’s history,” according to his prepared remarks. Facebook doesn’t expect Calibra, the subsidiary leading the project, to “make money at the outset.” The Libra Association, a 28-company group managing the project, doesn’t plan to compete with “any sovereign currencies,” he wrote. House Financial Services Committee Chair Maxine Waters, D-Calif., voiced concern about Libra competing with the dollar. The association “will work with the Federal Reserve and other central banks to make sure Libra does not compete with sovereign currencies or interfere with monetary policy,” Marcus said. If the U.S. doesn’t lead the digital currency market, foreign entities with far different values could take control, he wrote. The Treasury Department has “very serious concerns” about digital currencies like Libra being misused by money launderers and terrorism financiers, Secretary Steven Mnuchin said Monday, calling it a “national security issue.” Facebook will be subject to the same safeguard requirements as traditional financial institutions, he added. The platform's “dismal track record on data privacy makes its proposal to launch Libra a dangerous liability at home and abroad,” the Open Markets Institute said Monday. Congress and the Federal Reserve should block non-sovereign currencies like Libra and consider offering its own digital currency, the group said. The risks of Libra are “too great to allow the plan to proceed,” Public Citizen President Robert Weissman is expected to tell the committee. Libra raises questions that regulators aren’t prepared to address about national sovereignty, corporate power, consumer protection, competition policy, monetary policy and privacy, Public Citizen wrote.