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Home / Business / Facebook's Libra project gets hammered from all sides, with the Fed Chair Raising & Serious Concerns & # 39;

Facebook's Libra project gets hammered from all sides, with the Fed Chair Raising & Serious Concerns & # 39;



Federal Reserve Mayor Jerome Powell at a Financial Services Home Meeting on July 10, 2019.
Photo: Susan Walsh AP)

Facebook's already troubled Libra cryptocurrency project, which has already entered into significant opposition among the US House Committee on Financial Services and the Senate Banking Committee, is driving its head in further opposition from regulators.

Wednesday Wired reported, Federal Reserve Chair Jerome Powell told the House Committee that he has "many serious concerns" about Facebook's pivot to fund the arenas for privacy, money laundering, consumer protection and the stability of the global financial structure. He added that "The process of dealing with these concerns should be a patient and cautious, not a sprint," and that the Fed worked with other agencies and its foreign central banks to understand Libra's potential influence.

According to Wired, Powell's counterparts in other countries have similar concerns about the project, especially because it would rely on a Swiss-based association to steer the Libra platform and monitor the reserve fund, thus "running a global financial network outside the common central framework". banks like the Fed. "(Facebook cooperates with dozens of partner companies, each of which will be capped with one percent voting rights in the association, but it is by far the most prominent because of plans to integrate Libra payments through the wallet service called Calibra into its scattered social network.)

Wired writes:

Powell's concerns come at the heels of similar comments from top regulators in Europe and As ia. On Sunday, Benoît Cœuré, a manager of the European Central Bank, described Libra as a "wake up" to regulators, saying that it could not operate in a "vacuum" outside the typical central bank structure.

… Powell also confirmed that he had met with Facebook representatives in the months prior to the Libra announcement, part of the technology company's global tour of meetings with financial authorities. Apparently, many regulators left these meetings unsatisfied. Outside the EU, regulators in the UK, Japan and Singapore have called for a larger survey of Libra in recent weeks.

Earlier this week, Facebook said it did not plan to offer Calibra wallet services in India, where authorities banned banks from dealing with cryptographic baskets last year and reports have indicated that a total ban can be implemented. Indian economy secretary Subhash Garg told Bloomberg this week that "Design of the Facebook currency has not been fully explained. But whatever it is, it would be a private crypto competition and it is not something we have been happy with." [19659006] Facebook has hundreds of millions of users in India, which data from the World Bank is the world leader in transfers, making a lack of launch it is a serious blow to its global economic ambitions.

Facebook does not operate in China, although Bloomberg recently reported that People & # 39; s Bank of China (PBC) officials raised concerns about Libra's effects on lending, monetary policy and "volatile local currency currency risk That is, people switch from local currency to Libra a lot. According to the Bloomberg report, PBC's vice president of payments Mu Changchun said that Facebook has not yet explained how it will handle users' privacy, money laundering or terrorism and stated that the crypto rate must regulated by monetary authorities.

Representative Maxine Waters, who has requested a moratorium on Libra's concerns for concern, also asked Powell if Facebook could remain as "too big to fail" financial institution under Dodd-Frank's economic reform law during the hearing, Wired reported, Powell responded to what has not yet been decided, although regulators are investigating roblemet

Facebook founder Chris Hughes, who has switched to becoming a pronounced critic of the company's massive power, has recently announced in a Financial Times op-ed that "the Libra Association's goals specifically say this opportunity will encourage" decentralized governance ". In other words, Libra will disturb and weaken the nation states by allowing people to move out of unstable local currencies and into a currency nominated in dollars and euros and managed by corporations. "

Per CNBC, the growing pushback has resulted in growing industry skepticism that the Libra project will actually go off the scheduled launch date in the first half of 2020:

To successfully launch Libra and Calibra, Facebook must overcome many financial regulations Money Laundering, Money Transfer, Securities and Privacy, said Charle y Moore, CEO of Rocket Lawyer, a San Francisco-based company providing online legal services, as well as navigating all of these regulations as they differ from region to region. region, says Nayar.

"Only in the United States can it vary by city, state and federal level," he said. "Given the breadth of Facebook's reach and the broad ambitions of the new Facebook coin, it's difficult To predict which area will be most challenging for them. "

" Many countries are legitimately freaked out about the ruthless amoral Facebook vampire squid that has its tent Acles tightened their country's control over currency and banking systems, says early Facebook investor Matt Ocko CNBC. "I hope for God that enlightened regulators kill this thing in their tracks."

In response to a request for comment from Facebook, Wired wrote, the company traveled to a letter written by Calibras boss David Marcus to skeptical senators, who said it agreed with Powell's call for a "patient and cautious" approach to launch the Libra project.

[Wired]


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