Fed Chairman: Before Launching Libra, Facebook Will Have To Dispel Regulatory Doubts
Jerome Powell, chairman of the governing board of the US Federal Reserve Board, believes that Facebook must answer all the doubts that regulators have before it can launch its Libra cryptocurrency. He expressed this opinion during a hearing of the US House of Representatives Committee on Financial Services on July 10.
Rep. Steve Stivers asked Powell, “If Facebook cannot adequately answer your anti-money laundering, customer identification questions, what would be your message to banks that provide Facebook services, and what would be your recommendation for Facebook?”
Powell replied, “I think they cannot continue if the regulators are mostly not satisfied with the way the company is dealing with money laundering and the like. A number of doubts that I pointed out at the beginning, including data protection, consumer privacy and the like, should be worked out very carefully and carefully. “.
He also noted that cryptocurrency projects often go beyond the existing regulatory paradigm: “I think this is something that does not easily fit into our regulatory framework. [Cryptocurrency] does indeed potentially have a systemic scale. “.
Chairman Maxine Waters also asked Powell if the Fed has monetary policy concerns about the Libra announcement..
“Libra raises many serious concerns in the context of privacy, money laundering, consumer protection and financial stability. These doubts require a thorough and public decision before further promotion, “he replied..
Powell previously said that Facebook representatives contacted his department about Libra. “There are potential benefits, potential risks, especially if this currency becomes widespread. We will make high demands on them if they really decide to develop something, ”he said in mid-June..