The Chairman of the Federal Reserve Jerome Powell spoke to a congressional committee on Wednesday (July 10) about the organization’s concerns with Facebook’s proposed cryptocurrency Libra, according to a report by CNBC.
Powell said there are a number of issues with the proposed currency that need to be examined.
“Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability,” Powell said. “These are concerns that should be thoroughly and publicly addressed.”
Powell received numerous questions about the coin from the House Financial Services Committee during its semiannual congressional report. The report was meant to focus solely on monetary policy, but Rep. Maxine Waters asked about the global oversight of cryptocurrency globally, including Libra. Powell said the Fed needed to be cautious, and that its approach should be a “careful one, not a sprint to implementation.”
Powell noted that there was no way to move Libra forward without the company satisfying numerous concerns from lawmakers and regulators. “All of those things will need to be addressed very thoroughly and carefully, and in a deliberate process,” he said.
Countries and regulators around the world have expressed their trepidation about moving forward with Libra, citing money laundering, data and financial stability concerns. Waters asked for a delay in its implementation, saying that the move would continue Facebook’s policy of “unchecked expansion and extending its reach into the lives of its users.”
Powell expressed a similar sentiment, saying he “strongly believes we need to be taking our time here. It’s something that doesn’t fit neatly or easily within our regulatory scheme. It does have a potentially systemic scale, and for all the reasons we’ve discussed it needs a careful look.”
David Marcus, who is leading the project for Facebook, is scheduled to testify before Congress on July 16, and the House Financial Services Committee will hold a Libra-focused meeting on July 17. Marcus wrote a letter to Senate Banking Committee Chairman Mike Crapo and Sen. Sherrod Brown about Libra.
“We want, and need, governments, central banks, regulators, nonprofits and other stakeholders at the table and value all of the feedback we have received,” he said, adding that Facebook “can’t do this alone.”