More financial regulators are talking about Libra and saying that Facebook’s recently announced cryptocurrency won’t launch without close scrutiny, according to a report by the Financial Times.
The international Financial Stability Board (FSB) and the U.K.’s Financial Conduct Authority (FCA) have now both spoken publicly about the issue.
Facebook wants to alter the financial landscape with the introduction of Libra, and it has said that payments with the currency will happen instantly and cost almost nothing. The company teamed up with Uber, Mastercard, Visa and others on the endeavor.
Facebook execs want to be able to introduce and operate Libra without the same stringent regulations on traditional payment companies and banking institutions, but that doesn’t seem to be how things are lining up.
The FSB and the FCA have joined with the Bank of England (BoE) and the G7 in speaking out about the currency and its need for regulation.
FSB Chair Randal Quarles spoke about the issue in a letter to G20 before a summit in Japan this weekend.
“Though crypto assets do not currently pose a risk to global financial stability, gaps may occur where crypto assets fall outside the scope of regulators’ authority or from the absence of international standards,” Quarles said in the letter. “A wider use of new types of crypto assets for retail payment purposes would warrant close scrutiny by authorities to ensure that they are subject to high standards of regulation. The FSB and standard setting bodies will monitor risks very closely and in a coordinated fashion, and consider additional multilateral responses as needed.”
Andrew Bailey, head of the FCA, said he and the FCA were in talks with the U.K. Treasury and BoE about regulating Facebook’s Libra.
“We will have to engage domestically and internationally, with Facebook and this other [Libra] organisation. They are not going to walk through authorisation without that,” Bailey said.