Facebook’s libra project set back by central bankers’ fears

US Fed’s Jerome Powell and Bank of England governor Mark Carney both urge caution on crypto project

Facebook’s proposed libra digital coin must show it is “rock solid” before it can be allowed to launch, Bank of England governor Mark Carney said. Photograph: Dado Ruvic/Reuters

Facebook’s proposed libra digital coin must show it is “rock solid” before it can be allowed to launch, Bank of England governor Mark Carney said. Photograph: Dado Ruvic/Reuters

 

Facebook’s proposed libra digital coin must show it is “rock solid” before it can be allowed to launch, Bank of England governor Mark Carney said on Thursday.

His comments came a day after US Federal Reserve chairman Jerome Powell called for a halt to the project until concerns ranging from privacy to money-laundering were addressed.

“Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” Mr Powell told a congressional committee, adding that he did not think the project could proceed unless those concerns were addressed.

The social media giant plans to build a digital currency. Regulators are concerned it could quickly become systemic, given Facebook’s huge cross-border reach.

Mr Carney, who joins a growing chorus of central bankers unsettled by the project, said many issues needed addressing first, such as anti-money laundering and terrorist financing controls, and managing and safekeeping the assets underpinning libra.

“If you are a systemic payment system, you have to be on all the time. You can’t have teething issues, you can’t have people losing money out of their wallets,” Carney said.

“This is not learning on the job stuff, it’s got to be rock solid right from the start or it’s not going to start.” Mr Carney said.

The central bankers’s comments have knocked cryptocurrencies, with most losing between 7 and 8 per cent of their value on Thursday. – Reuters