Cryptocurrency

SEC Chairman Mum On Whether Libra Qualifies As Security

SEC

When it comes to potential oversight of Facebook’s Libra, the head of the U.S. Securities and Exchange Commission declined to tell a congressional panel if the digital currency would be regulated as a security.

And, even though Chairman Jay Clayton hasn’t talked about the cryptocurrency plan with the company, he does have an “open door” policy, Reuters reported.

When asked if he thought Libra would be a security, the official said, “I’m not prepared to make a decision like that here.”

Clayton could have a pivotal part in possibly regulating Libra. In the past, he has warned that similar currencies have turned out to be securities offerings that have to be regulated.

Commissioner Hester Peirce said, “I would like to see us be a little more forward thinking” on token utility use. Those are units of services that can be purchased digitally. Peirce also noted, “I am hoping we can work to create some sort of safe harbor.”

As it stands, Libra is experiencing growing pressure from regulators in different countries. Germany and France have said Libra is potentially harmful to the financial sector and pledged to stop it from operating in Europe.

Those countries instead support the formation of a public digital currency. The European Central Bank (ECB) said it was working on a public digital currency that would make projects like Libra unnecessary.

Germany’s Finance Minister Olaf Scholz and France’s Finance Minister Bruno Le Maire have reportedly said digital currencies such as Libra are dangerous to consumers and could damage financial stability, as well as the “monetary sovereignty” of European nations.

“France and Germany consider that the Libra project, as set out in Facebook’s blueprint, fails to convince that those risks will be properly addressed,” they said.

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