Global regulators question Facebook on Libra cryptocurrency
Global financial regulators questioned representatives from Facebook's planned cryptocurrency Libra in Basel, Switzerland, on Monday.
Fnality International and JPMorgan, which announced its own cryptocurrency in February, were also at the meeting focused on "policy and regulatory issues posed by the emergence of "stablecoin" initiatives backed by financial institutions and large technology companies," according to a statement by the Bank for International Settlements.
Facebook rolled out plans for Libra, which would open a huge new revenue stream, in June.
"We recognize that blockchain is an emerging technology, and that policymakers must carefully consider how its applications fit into their financial system policies," Dante Disparte, Libra's head of policy and communications, told FOX Business in a statement. "Our goal is a stable, secure, low-cost payment system that can expand access and improve financial services for billions of people. We are committed to ongoing engagement with central banks and financial regulators as we work toward that goal."
The international regulators include officials from 26 central banks, including the Federal Reserve and the Bank of England. A G-7 working group called for Monday's meeting, and they will produce a report on the topic by mid-October, according to the Bank for International Settlements.
Facebook rolled out plans for cryptocurrency Libra, which would open a huge new revenue stream, in June.
"We took part in constructive dialogue in support of the Libra Association with policymakers during the G-7 conference," a Facebook spokesperson told FOXBusiness in a statement. "We appreciate the opportunity to address concerns and seek avenues of cooperation. Engaging with regulators, policymakers, and experts is critical to Libra's success. This was the whole reason that Facebook along with other members of the Libra Association shared our plans early. The time between now and launch is designed to be an open, collaborative process."
Officials inside and outside the U.S. have struck a skeptical tone on Libra.
France's finance minister said last week that Libra should be barred in Europe because it threatens "the monetary sovereignty of countries."
"I want to be absolutely clear: In these conditions, we cannot authorize the development of Libra on European soil," Bruno Le Maire said at the OECD Global Blockchain Policy Forum in Paris. "The monetary sovereignty of countries is at stake from a possible privatization of money … by a sole actor with more than 2 billion users on the planet."
Federal Reserve Chairman Jerome Powell has been skeptical of Facebook's initiative, a position he reiterated earlier in September. Libra could disrupt the financial system if it's not held to the highest standard, he said, and it "has a burden of proof to carry."
In June, U.S. Rep. Maxine Waters, a California Democrat who heads the House Financial Services Committee, called on Facebook to suspend plans for the new currency until Congress and regulators are able to study it more closely.
That same month, the Bank of England's governor Mark Carney was broadly supportive of the future of new payment systems and their role in the financial system, he warned that the bank "approaches Libra with an open mind but not an open door."
CLICK HERE TO READ MORE ON FOX BUSINESS
The Associated Press contributed to this article.