Facebook’s Libra cryptocurrency has only been announced a day and regulators are eager to dip their claws in the upcoming stablecoin.
Digital currencies like Bitcoin transcend national borders and Facebook’s new Libra project is aiming to cash in on this aspect. Regulators are keeping a wide eye on Facebook as the network focuses on being the first global central bank.
Speaking at the ECB conference in Portugal, governor for the bank of England Mark Carney called on G7 nations to heavily scrutinise the launch of Libra.
“Anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation. We will look at it very closely and in a coordinated fashion at the level of the G-7, the BIS, the FSB and the IMF. So open mind, but not open door.”
Former chair for the Federal Deposit Insurance Corporation Sheila Bair recently sat down in an interview with CNBC. Bair expressed her worries on the launch of Facebook’s upcoming stablecoin saying:
“What are they doing with the money, if I give them some dollars to buy the Libra, they’re kinda being fuzzy about that in their whitepaper…The strength of the collateral is a question I would have about it.”
As reported by CCN:
“Facebook has 2.6 billion users worldwide. Those users exchange value in over 100 different currencies. Despite Libra’s claim as a future stablecoin, it’s unclear yet how Facebook will manage investment with its foreign reserves.”
Blair has called for a cryptocurrency backed by Federal entities. There is one glaring issue with this though. She noted in her interview:
“[FedCoin] would give people a very safe way to make payments. I mean you don’t have to worry about the Fed defaulting right, they can print their own money.”
The feds can very well print their money, sure. But the feds jurisdiction has a cut-off point and that is at the border.
Facebook has no borders.