Facebook's Libra meet with 26 Central Bank and the US FED today: Highlights and Updates

world news   16 Sep, 2019   theblock.com   Views: 373

Officials from 26 central banks, including the U.S. Federal Reserve and the Bank of England, are meeting representatives of Libra, the Facebook-led stablecoin project.

Benoît Coeuré, a member of the European Central Bank’s (ECB) Executive Board, will chair the meeting in Basel, Switzerland, the Financial Times reported Sunday. Coeuré has warned that “the bar for regulatory approval will be very high” for Libra to operate in the EU.

Libra representatives will specifically meet the Bank of International Settlements’ (BIS) Committee on Payments and Market Infrastructure, whose representatives are senior officials of 28 member central banks.

An official told the FT that Libra’s founders have been invited to answer key questions about the proposed stablecoin’s scope and design “with the findings feeding into a report for G7 finance ministers in October."

European lawmakers are reportedly concerned that Libra will become popular in the EU where customers still face difficulties in making overseas payments. Last week, France’s Minister of the Economy and Finance, Bruno Le Maire, said that the country will halt the development of Libra in Europe because it threatens the “monetary sovereignty” of governments.

“We welcome this engagement and have deliberately designed a long launch runway to have these conversations, educate stakeholders and incorporate their feedback in our design,” the Libra Association was quoted as saying in the FT report.

Update:

A board member of the European Central Bank (ECB) has argued that stablecoins like Facebook’s long-awaited Libra coin pose risks to public policy priorities.

ECB board member Benoit Coeure delivered his comments on stablecoins’ regulatory issues at a meeting at the Bank of International Settlements (BIS) in Basel, Switzerland, Reuters reported on Sept. 16. Coeure specifically stated:

“Stablecoins are largely untested, especially on the scale required to run a global payment system. [...] They give rise to a number of serious risks related to public policy priorities. The bar for regulatory approval will be high.”

26 global central banks and Libra

The event at the BIS hosted 26 global central banks and the team behind the Libra project to assess the financial stability risks of the project. The event was reportedly the first major encounter between Libra’s founders and global policymakers since Facebook revealed its plans for the stablecoin project on June 18.

Previously, Coeure stipulated that the Libra coin will not launch until global regulators are satisfied. He said that the proposed stablecoin must be guaranteed to be safe for users before it can launch, adding that guaranteeing the protection of user privacy and ownership rights may require significant consideration and lengthy discussion by regulators. Coeure also encouraged financial regulators to act fast to prepare for Libra’s release.

Response from the Libra team

Amid the ongoing meeting between Libra founders and the global central banks in Basel, Calibra CEO David Marcus stepped up to protect the position of the Libra Association.

Marcus argued that the Libra project does not intend to form a new currency, but rather build a “better payment network and system running on top of existing currencies” to deliver meaningful value to users over the globe. He emphasized that there will be no creation of new money, which will “strictly remain the province of sovereign nations.”


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