WASHINGTON (Reuters) – U.S. Federal Reserve Chairman Jerome Powell stated on Wednesday that Facebook’s plan to construct a digital currency known as Libra “cannot go forward” until severe concerns have been addressed.
FILE PHOTO: Small toy figures are seen on representations of digital currency in entrance of the Libra emblem on this illustration image, June 21, 2019. REUTERS/Dado Ruvic/Illustration/File Photo
The sturdy feedback from the top of the U.S. central financial institution, the nation’s high monetary regulator, provides to misgivings in regards to the project, which has already produced sturdy skepticism amongst high policymakers throughout the globe.
“I don’t think that the project can go forward … without there being broad satisfaction with the way the company has addressed money laundering, all of those things,” Powell stated in an look earlier than the U.S. House of Representatives Financial Services Committee.
Powell stated the digital currency project, introduced by the social media large in June, raised “serious concerns” for regulators.
“Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” he instructed the committee. “These are concerns that should be thoroughly and publicly addressed.”
Powell stated any regulatory overview of the not too long ago introduced project needs to be “patient and careful.”
He stated the Fed has established a working group to observe the project and is coordinating with different central banks throughout the globe. He additionally expects the U.S. Financial Stability Oversight Council, a panel of monetary regulators, may also overview the thought.
Powell famous that he helps monetary innovation so long as acceptable dangers are recognized, however he stated the large platform loved by Facebook instantly units Libra other than different digital currency tasks.
“Facebook has a couple billion plus users, so I think you have for the first time the possibility of very broad adoption,” he stated.
Any issues that might emerge via Libra “would arise to systemically important levels just because of the mere size of Facebook.”
Reporting by Pete Schroeder and Trevor Hunnicutt; Editing by Paul Simao