Two more financial regulators have warned that they won’t allow Facebook’s planned cryptocurrency, Libra, to launch without looking at it closely. The international Financial Stability Board (FSB) and the U.K.’s Financial Conduct Authority (FCA) have joined the Bank of England (BoE) and the G7 in speaking out about the need to thoroughly vet Facebook’s plans to release Libra next year.
In a letter to G20 leaders before their summit in Osaka, Japan this weekend, Randal Quarles, head of the FSB and vice chair for supervision at the Federal Reserve, spoke of the potential risks posed by digital currencies.
“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 on Tuesday (June 25), according to the Financial Times. “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.”
He added, “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, CEO of the FCA, revealed that his organization is working with the U.K. Treasury and the BoE to investigate Facebook’s plans.
“We will have to engage domestically and internationally with Facebook and this other [Libra] organization. They are not going to walk through authorization without that,” Bailey said on Tuesday.
As for the U.S., the Federal Reserve stated that it will also be holding Libra to high standards when it comes to consumer protection and regulation.
“Libra’s a new thing; we are looking at it very carefully,” said Federal Reserve Chairman Jerome Powell on Tuesday. “Given the possible scale of it, I think that our expectations — from a consumer protection standpoint, from a regulatory standpoint — are going to be very, very high.”