Libra Association representatives are getting ready to face questioning by 26 central banks over the potential peril the proposed cryptocurrency poses to financial strength, the Financial Times reported Sunday (Sept. 15).
The U.S. Federal Reserve and the Bank of England are among the banking regulators that will convene with Facebook’s Libra on Monday (Sept. 16), in a meeting that will be chaired by Benoît Coeuré of the European Central Bank. Coeuré has warned “the bar for regulatory approval will be very high.”
Questions will revolve around the crypto’s outlook and architecture, and the findings will be documented for G7 finance ministers in October, an official told FT.
The G7 is currently led by France, which put together a committee also chaired by Coeuré in order to scrutinize Libra and other cryptocurrencies. The Basel-based Financial Stability Board, chaired by a Federal Reserve deputy governor, reports to the G7 and is also planning to examine Facebook’s plans for Libra.
Facebook said it welcomes open exchange with regulators.
“In the nearly three months since the intent to launch the Libra network was announced, we have prioritized engagement with regulators and policymakers around the world,” Libra told FT. “We welcome this engagement and have deliberately designed a long launch runway to have these conversations, educate stakeholders and incorporate their feedback in our design.”
The Libra Association, a coalition of 28 members put together by Facebook to help bring the cryptocurrency to fruition, includes Visa, Mastercard, Uber, Spotify and the subsidiary Calibra, among others. The members all made a non-binding promise to invest at least $10 million.
Some early backers of the cryptocurrency are spooked by the scrutiny of global regulators, and although they don’t think the idea for Libra is a bad one, they want to make sure that it’s moving in a direction that will allow it to be viable.