European Central Bank Executive Demands Quick Regulatory Action on Facebook’s Libra
Ever since Facebook released the details of its upcoming native cryptocurrency Libra, regulatory bodies across the globe have increased their scrutiny in the crypto space. Moreover, several regulatory authorities have demanded a better explanation from Facebook regarding the modus operandi of Libra with many central banks casting a wary eye on it.
As per the Bloomberg report on July 7, the European Central Bank’s executive board member Benoit Coeure has asked global financial regulators to prepare quickly for Facebook’s upcoming stablecoin.
During his recent address in Aix-en-Provence in southern France, Coeure stated that the development of new asset classes and financial services in absolutely irresponsible. He added: “It’s out of the question to allow them to develop in a regulatory void for their financial service activities, because it’s just too dangerous. We [financial regulators] have to move more quickly than we’ve been able to do up until now.”
Coeure adds that the arrival of such new digital assets that unearthed the gaps within the existing financial regulations. More importantly, it just highlight the banks’ slow rate for the adoption of new technologies.
Coeure notes “All these projects are a rather useful wake-up call for regulators and public authorities, as they encourage us to raise a number of questions and might make us improve the way we do things.”
In the past, the ECB has approached the development of digital assets with balanced considerations. The central bank has been also studying the benefits and drawbacks for issuing central bank digital currencies (CBDCs).
On the other hand, the crypto industry’s famous personalities have lauded the entry of Facebook with the launch of Libra. During a recent interview with Bloomberg, Circle CEO and co-founder Jeremy Allaire said that Libra will force regulators to develop national policies around digital assets.
So far, regulators had been deliberately delaying to create a proper framework for cryptocurrencies. Now, they will be forced into action with the entry of this tech behemoth.
Facebook is already scheduled for a hearing ahead this month in front of the U.S. Congress where it is expected to answer a lot of concerns raised regarding privacy and other matters associated with the Libra launch. Facebook’s chief of blockchain division David Marcus will testify before the Congress.
On the other hand, the U.K.’s top three regulators are working to deal with the arrival of Libra. Bank of England governor Mark Carney has said that they will approach it with an open mind but not with open doors.