Global Regulators To Question Facebook Over Its Libra Cryptocurrency

Concerns have been raised by EU governments over the threat Libra poses to financial stability, the Financial Times reports.

Global regulators from inside and out of Europe, as well as the US Federal Reserve, will be questioning Facebook on Monday about its Libra cryptocurrency.

Among the top concerns from EU governments is the threat that Libya poses to financial stability, the Financial Times reports. It also reported that officials from 26 central banks, such as those from the US Federal Reserve and the Bank of England, will meet with representatives of Libra in Basel on Monday.

FT said that Libra’s founders, among other questions, have been requested to respond about the currency’s intentions, scope and design.

European countries including France and Germany have made their concerns public, saying Libra poses risks to EU states’ sovereignty.

Libra will reportedly be used to buy goods and services, and send and receive money, via the digital currency on Facebook’s platforms, such as WhatsApp and Messenger. It is designed to be backed by a basked of currency assets, avoiding wild swings in value experienced by other cryptocurrencies such as bitcoin. It is expected to launch in the first half of 2020.

Libra will not be decentralised, the Guardian reports, but rather it will be entrusted to a Swiss-based association of major technology and financial services companies.

In addition to Facebook, Libra is backed by payment companies such as Visa, MasterCard and PayPal, as well as ride-sharing apps like Lyft and Uber.

Concerns about national sovereignty stem from, among other reasons, concerns that Libra could help people abandon national currencies in times of crisis, making the Government’s task of managing the economy that much more complicated.

 

 

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